Away with the fairies

Issue No 11 on the DTI consultation document about adjudication is all about “magic dust”. The issue is whether a person who ordinary everyday law says is not impartial, and ordinary everyday people say is not impartial, can be blessed with fairy dust by the Westminster fairy and made impartial. Oh, cut to the chase, Bingham! Please, please do not allow a person to make binding decisions when he has a personal interest in the decision. The DTI is asking you to give the thumbs-up to adjudicators being able, contrary to common law, to make binding decisions about their own right to be the adjudicator. No, no, a thousand times no.

Give me an adjudicator who decides disputes on the facts concerning “A” and “B”, and the law governing “A” and “B”, without a sniff or hint of bias. But save me from a bloke who knows that if he decides he has no jurisdiction, he loses his fee from the appointment. Or the bloke who, even if he is not actually biased in his own mind or pocket, has the appearance of bias. Parliament will go wrong to oust the common law – it will bring adjudication into disrepute. Do not empower adjudicators to decide their own jurisdiction. Get an outside adjudicator to decide.

Issue No 10 is “preventing stakeholder accounts”. Apparently, some contract documents create a contractual term, which “requires” the adjudicator not to order monies to be paid over; instead the money gets locked away. The DTI proposes outlawing all that. But it can all come back again in the Scheme for Construction Contracts if the payee (the winner) “is [found to be] subject to insolvency proceedings”. The adjudicator is to be asked to be the keeper of the award as “trustee” for one month. In that time, the payer must begin litigation or arbitration or else the award is released. Who on earth thinks of these bright ideas? Don’t burden the adjudicator with this bumph. The adjudicator is merely a person who decides arguments between “A” and “B”. If the law allows “A” and “B” to have a stakeholder account enshrined in a contract, so be it. Change the law of contract, not the powers of an adjudicator. Adjudicators “adjudicate” on the rights, wrongs and evidence – don’t give them special laws to wield. The powers held by an adjudicator are only for the due process of adjudicating. He can hear an argument about unfair contract terms and declare a term of no effect because the law of contract says so. He can’t overrule a contractual term because he is an adjudicator. The Scheme is merely a set of rules for administering the adjudication “due process”. You can’t change the law of contract by changing the Scheme.

Issue No 12 again tries to overrule what the parties have contractually agreed to. Say “A” and “B” agree in a binding contract that decisions of the certifier (such as the architect, contract administrator or engineer) are “final and conclusive”. So if “A” or “B” complains about an architect’s loony certificate, that’s that – it’s useless to complain. But the DTI says that sounds a bit orf. So, says the DTI, let’s give the adjudicator a magic wand and a sack full of magic dust. Let the adjudicator sweep aside the final and conclusive nature of the agreed term. Let him declare it void for interim accounts.

If you want to change the law of contract, change the law of contract. Don’t empower a dispute decider to change the law of contract

Stop it, stop it! The adjudicator can’t change the contract; he only adjudicates quarrels about the contract. Repeat after me: “If you want to change the law of contract, change the law of contract.” Don’t empower a dispute decider to change the law of contract. I repeat again, the Scheme is merely about due process; it can’t change the law of contract. If you want to change that law (like outlawing paid when paid) you must make primary legislation for law of contract. If an architect purports to make a “final and conclusive” certificate and purports to shut out any dispute going to an adjudicator about that certificate, it will be an uphill shut-out. If the architect has behaved one fraction less than judicially, his so-called “final and conclusive” certificate is useless. There is no reason why a dispute about the architect’s fairness shouldn’t come to adjudication. And if the offered bargain contains such a clause, why not tell the offerer to offer it to the fairies?

Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on info@tonybingham.co.uk