CROUCH REVERSED?

It is unlikely that there are many who have not by now heard of the overruling by the House of Lords of the Crouch decision in Beaufort Developments (NI) Ltd v Gilbert-Ash (NI) Ltd & others. The construction industry has been struggling with Crouch since 1984, and finding ways round it; see for example Barker v Portman Hotels, and Reading University v Miller. The concern for the past 14 years has been to ensure that there was an arbitration clause in the contract, since without one (or if it had been struck out of the standard form) the parties were stuck with the Architect’s or Engineer’s certificate.

The Crouch decision has been severely criticised by Ian Duncan Wallace, and the opinions of two of their lordships paid tribute to his writings. However, close reading of the opinions leaves one with the uneasy feeling that the ghost of Crouch may not have finally put to rest. In the Beaufort case there had been no final certificate (both the Beaufort and Crouch cases were concerned with interim certificates). Therefore no certificate had been issued by which the parties had agreed should be taken to provide conclusive evidence as to the matters in dispute. Although the court was in no different position from an arbitrator, it did not have the additional power which the arbitrator had under the JCT contract to issue fresh certificates in place of those already issued by the architect; but the court did not need that power in order to resolve the disputes which had arisen in the Beaufort case.

Of interest also is Lord Hoffman’s view of the Crouch case where the architect was thought to have the power to modify the contractual obligations of the parties. He found this a strange concept. "The powers of the architect or arbitrator, whatever they may be, are conferred by the contract. It seems to me more accurate to say that the parties have agreed that their contractual obligations are whatever the architect or arbitrator interprets them to be."

The editorial panel are what lawyers choose to call "laymen" (ie non-lawyers). Since lawyers are often heard expressing the view that only they should act as arbitrators, we can look on with a detached irony at the contortions of the law in supplying us with the treasured object of certainty. We are also left to wonder whether if Duncan Wallace had not taken up his pen we would still be struggling with Crouch and would be left to do so for the unforeseeable future. According to his writings, other loose cannons have been going off recently, with the result that a lot more work has been created for lawyers.

Does the Beaufort decision announce the death of the arbitration clause? In view of the Construction Act, and the decision in the Sopex Oils case, would it not be preferable for the enforcement of adjudicators’ decisions to be referred directly to the courts, rather than face the uncertainty that an arbitration clause would leave in so doing?