Accidents will happen … in adjudication

According to my tally, we have had 452 court judgments talking about, and explaining, UK construction adjudication. I will remind you of number one and tell you about 452. And if you asked all the judges in all those judgments the question “what is adjudication?”, they would all sing the same song. And if you asked all the construction folk and their representatives and their adjudicators the same question, they would would all sing the same song too, but it wouldn’t be the same as the judges.

The industry’s choristers treat adjudication as a dispute resolution system; it works ever so hard to explore every argument in the nooks and crannies of the dispute. Industry adjudication is a sophisticated fight to prove this or that is right or wrong. It makes you worn-out even thinking about all this searching at breakneck speed for the “right answer”. Except for the speed, it sounds like litigation or arbitration. The judge in case 452, Atholl Development vs UBC, doesn’t say anything of that sort. He says it’s “rough justice”. Judge after judge over these 12 years of statutory adjudication have consistently defined it as a “pay now, argue later” system.

In judgment one, Macob vs Morrison, the judge there said the intention of parliament was “to provide a speedy mechanism for settling disputes on a provisional interim basis”. He added that the timetable was so tight that it was “likely to result in injustice” but that parliament knew that. Parliament hasn’t abolished the arbitration or litigation of construction disputes; rather “it has merely introduced an intervening provisional stage in the dispute resolution process”. The judge who said that was Mr Justice Dyson. He soon got promotion all the way to the House of Lords. You can bet the other judges take notice of what he says. I do.

Adjudicators are not singing a song for rough justice. Their song is for help and co-operation. It pleads for signposted documents, captured issues and succinct arguments

In the Atholl case, UBC contracted to build 51 houses in Inverness. There was an ordinary JCT contract. Come the final account, UBC said £7.9m. Atholl said £5.5m. An experienced adjudicator was appointed. He came to the figure £6.2m. So Atholl was to pay UBC a balance of £348,000.

Now then, I can guarantee that this adjudicator was hellbent on doing a thorough job. He would have looked at every angle, every variation, every claim. And sometimes (although I don’t know if it’s true about this adjudication) he has to coax the parties to stop warring. As well as that, he had 16 lever arch files sent to him and was faced with submissions coming in throughout the adjudication, covering points beyond the plethora of issues on the final account.

When the decision was published, Atholl would not comply. UBC went to court for help. Atholl said the adjudicator had made a host of mistakes, implying that he had not paid any attention to certain documents and submissions put in by Atholl: for example, he took the wrong figure for an already agreed credit. Also, he overlooked a price analysis, he ignored a measured account for excavation and his conclusion made no sense. Oh, dear. He also double-counted the cost of some retaining walls. The judge said: “I have some sympathy for the submission by Atholl that the adjudicator may have fallen into error.” Can you hear a “but” coming? The “but” is all about “what is adjudication?” and the answer “rough justice: pay now, argue later”. Put this way, it’s no good looking at the adjudicator’s written award for evidence that they have fallen into error. That document is recognised by the judge as written under time pressure; in any case there is a presumption in law of propriety and regularity. The basic position is that the adjudicator is taken to have at least looked at all relevant materials. “He may have failed to notice a point made by Atholl or a matter of detail. If so, so be it. That is adjudication, for good or for ill.” That’s what the the judge said in Macob all those years ago. Mistakes are inevitable; the court does not “blame” the adjudicator for them.

But here is another but: adjudicators are not singing a song for rough justice. Their song is for help and co-operation. It pleads for signposted documents, captured issues and succinct arguments; no warring, no bullying.

Tony Bingham is a barrister and arbitrator at 3 Paper Buildings Temple