Forum shopping: Retail therapy

By now, most of the major grounds for disputing an adjudicator’s decision have been seen in one guise or another. There is one area out there however which is still relatively unexplored in adjudication, known as forum shopping.

Forum shopping is nothing new in disputes. Take Agincourt for example, where the English set themselves up with the wind behind them so their long bow archers’ arrows flew further, causing untold damage to the French who could not get close enough to make their slow-loading crossbows pay. Having your dispute resolved in the right place could really pay dividends.

In more modern times, we have seen forum shopping extensively in cross border litigation. Some parties are keen to sue first if for no other reason than to get the dispute heard in their own local courts, on the principle that once the court starts to hear a matter it won’t easily be persuaded to let it go elsewhere. Sometimes this works and sometimes it doesn’t. Occasionally it can go badly wrong, such as when a dispute is heard in two different localities at the same time.

Adjudication is not obviously fertile ground for forum shopping. However there are two ways it may go on. first is in relation to the seeking of an appointment on the initial adjudication

Often parties make provision for this aspect, deciding that a particular country or jurisdiction should hear any dispute. This is often linked to deciding on a dispute resolution mechanism such as a particular type of arbitration. Forum shopping has hit the news recently in a number of ways. One aspect of this is parties popping over the border to place a business in an insolvency process to gain the benefit of processes viewed as beneficial (pre-pack administrations, for example). Another aspect is the use of the London courts for high-profile or high-value divorces and cases relating to projects in Russia and other locations. In general the media is quick to criticise parties forum shopping and the courts are not keen on it either.

Adjudication may seem like a local or domestic affair free of this type of problem. It is limited to contracts performed in England and Wales and normally the adjudicator is selected by a nominating body. So it is not obviously fertile ground for forum shopping. However there are two ways it may go on.

First is in relation to the seeking of an appointment on the initial adjudication. Here there is scope for a party to try and guide a nominating body to a particular adjudicator by application of a series of criteria.

A blend of allegedly suitable qualifications, experience and location attributes may result in the appointing of someone who is seen as particularly suitable.

A second form of forum shopping can take place where there has already been one adjudication and a party is about to commence a second. At this point such a party is faced with the strong presumption that the first adjudicator should be appointed again. Most nominating bodies do this and take the view that there is a cost saving based on existing familiarity with the parties, facts or contract. Perhaps in the majority of instances this is accepted by the party starting the second adjudication. If they won first time, they might feel they’ll have a good chance second time. Even if they lost they may put that down to their case in the first matter or recognise that the decision reached was one open to the adjudicator and you don’t always win everything. But occasionally a party might be inclined to seek to avoid the same adjudicator being appointed. It seems a number of devices are being deployed to achieve this, including approaching a different nominating body (if there is more than one named in the contract or if no nominating body is specified) and/or identifying adjudicators not suitable for the dispute allegedly by reason of conflict of interest or prior experience of the party’s representative, which just happens to remove the first adjudicator from the running.

Sooner or later a case on enforcement is likely to involve this type of conduct. Arguably it is a breach of the nominating body’s own rules for appointment and/or the principle enshrined in Shepherd vs Mecright that a party seeking adjudication is to “be open and honest in its presentation”. It may be conduct which goes wider and breaches the principles of natural justice in that a party is seeking to obtain an advantage through its conduct on the nomination request form. It will be interesting to see if the courts look into whether there was such intent or simply decide that the mere sniff of such is enough to render the decision unenforceable.

So it may be that a trip to the shops might end with a longer trip to the courts.

James Bessey is a partner at DWF