Coming back for seconds

The bigger the dispute, the broader the brush. So if you come to the adjudicator with umpteen heads of claim in one go and expect to be all done in that 28-day timetable, don’t whinge if you think the outcome is a tad skewwhiff.

The adjudicator’s job is to do broad justice between the parties. If there are lever arch files by the yard and quarrels by the mile, it’s ever so likely the adjudicator will be covering the bumf with not quite the thoroughness of a code breaker at Bletchley Park. Broad brush is what you get. Mistakes too. Analysis askew, stuff of argument easily missed.

Redwing Construction Ltd came to adjudication about its major apartment conversion in Westminster with developer Charles Wishart. It wasn’t quite a multi-headed-boxes-of-files dispute, but it did result in the second adjudicator not really knowing what the first adjudicator decided and it did contain mistakes, which the court had to fathom whether it would allow the adjudicator to correct. Some of you know this as the slip rule.

The contract document was JCT Prime Cost. I don’t see it used much, but it’s respectable. The idea was that Redwing would be paid actual cost expenditure, plus a fee, plus a site cost of £3,500 a week. The snag arose when the job ran umpteen weeks longer than planned and Redwing held its hand out for umpteen weeks at £3,500. Wishart disputed this and an adjudicator was called in. The notice of adjudication asked for an award of extension of time and an order that £3,500 be paid for each week of delay. The adjudication focused on why there ought, or ought not, to be an extension of time. The adjudicator decided the extension of time was 34 weeks at £3,500 a week. The adjudication ended and so far as can be seen Wishart paid up.

But Redwing now came with a second adjudication. It was about the final account with numerous heads of claim. One was that the weekly compensation ought to be £3,857.70 rather than £3,500. Wishart’s legal team jumped on all that. It told the second adjudicator he couldn’t deal with such a claim because the first adjudicator had awarded £3,500 per week. The rule is that the key decisions of an adjudication bind all future adjudicators until a final tribunal (court or arbitrator) decides the matter afresh. Redwing countered by saying the first adjudicator had not decided any dispute about the weekly rate. But it was £3,500 that had been claimed and not argued. The second adjudicator pressed on. He revised the rate up to £3,857.70. Mr Wishart refused to pay.

The rules are plain. No party can seek a further decision by an adjudicator on a dispute or difference if that dispute or difference has already been the subject of a decision by an adjudicator. Not only is the same dispute a no-go area, but “substantially the same dispute or difference” is also no-go.

The judge Mr Justice Akenhead gave helpful guidance. First determine what dispute was actually brought. It can be in wide terms or narrow (jurisdiction). Next see if the parties extended the jurisdiction during the adjudication. Then see what the adjudicator decided in relation first to the referred dispute then any arguable defence put up within jurisdiction. Now scrutinise the parts of the adjudicator’s decision which do not actually decide the dispute. It is only these parts which can come to any later adjudication. The adjudicator’s tangential remarks or opinion that is not part of the dispute are not jurisdictionally part of the decision.

When the judge looked at the first adjudication he asked if a dispute had by then crystallised as to the £3,500 per week. It hadn’t. The dispute was about the extension of time. Do you see how he looked behind what was going on? If there was no dispute, the way was clear for the second adjudicator to deal with what was by now a quarrel.
Another useful pointer of this judgment is how to deal with the adjudicator’s mistakes. The slip rule allows the adjudicator to correct obvious errors, if done promptly. No, this is not a chance for a rethink or to recap on the papers. The adjudicator asks himself: “Do I acknowledge I made a mistake by not giving effect to my first thoughts?” If yes, it’s a slip. Do the right thing.

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