Money’s silver tongue

Try, just try, to get an adjudicator to declare that they have no right to adjudicate. It’s hopeless. In truth and law the adjudicator is the last person to ask if they should give up an appointment. Let me explain.

To have the right to adjudicate, there has to be a contract and a dispute, and that dispute has to arise under that contract. Fail to show those three thing exist and you fail to show the right to call up the adjudicator. Time and again there is a squabble over those rights. The adjudicator comes fresh-faced and fee-hungry to the dance only to be told that the outfit that sent the invitation can’t provide a dance floor. Will he go quietly? Not on your life! Hell’s bells, think of the pocket!

The group known affectionately as the Raindrops – the Construction Umbrella Bodies adjudication Task Group – are mulling over whether adjudicators should have the power to decide their own fate. They have told Sir Michael Latham, who is currently considering changes to the Construction Act, that they aren’t sure it’s a good idea.

Do boot it out. Why? Oh come on, the adjudicator can’t possibly be impartial, neutral, unbiased, even-handed when they have a financial interest in the outcome.

If the parties have an argument about jurisdiction, the adjudicator is in no position to objectively examine that argument. He is arguing in his own mind and pocket to stay. He is pulling himself up by his bootstraps. The law is clear: if the tribunal has an interest in the outcome of any decision, it is, in law, biased. That’s actual bias.

Test another way: “Would a fair-minded and informed observer, having considered the facts, conclude that there was a real possibility that the tribunal was biased?” That’s the House of Lords test in a case called Porter vs Magill. And if the fact is that the adjudicator will be giving up a lump of fee-earning, how do you answer the question? Easy isn’t it?

One adjudicator told me he always ignored jurisdictional challenges provided the party who wanted him to press on guaranteed his fees.

One adjudicator told me he always ignored jurisdictional challenges provided the party who wanted him to press on guaranteed his fees

Raindrops hasn’t mentioned the bias point to the Latham committee. In fairness it has said there are “diverse and opposing views within the task group about whether the adjudicator should be given an express power to rule on their own jurisdiction in relation to all or any issues”. Nor has Raindrops mentioned what happens in practice when a “right to adjudicate” row blows up on day three of the 28-day game. I will tell you what happens. The respondent and claimant spend umpteen days arguing about whether the claimant has proved the right to adjudicate. The actual dispute that was originally brought to the adjudicator is forgotten or at least parked while this happens. I know of one case in which the adjudicator decided on day 27 that he had jurisdiction, which left him 24 hours to decide the original dispute – which was, ironically enough, about an extension of time.

Money's silver tongue

Believe me, the 28-day period is not the time to be dealing with a set of arguments not touched on before the adjudication began.

And if, just if, adjudicators are trusted to objectively deal with this satellite argument, can we have some rules for doing it? First, the fact that the responding/defending party has raised a hand of challenge to the referring party does not put the burden on it to prove that no right to adjudicate arises. When a party claims that it has a right to adjudicate, it must prove that it really does have that right. It must prove the existence of something called an express or implied term. And if the arguments are finely balanced, it hasn’t proved the existence of the right. In any case, a lot of these arguments are technical – such as whether a proper appointment was made. For heaven’s sake, if in doubt simply stop. Similarly there are lots of times when one party says there is not yet a dispute between the parties. For heaven’s sake, if in doubt, simply stop. Let the parties finish arguing before commencing the adjudication.

None of this is difficult stuff – until the adjudicator lets their pocket have a vote.

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.