NEC contracts: Ours is not to reason why

When the adjudicator’s fee account came in for Babcock Marine (Clyde) Ltd vs HS Barrier (Coatings) Ltd, it included 28 hours of QS assistance. Foul, shouted one of the parties at the adjudicator; the decision in the award is tainted, unenforceable, because you didn’t tell us of any helper, nor what they were doing. This, said the party, is a breach of natural justice. 

Their pointy stick jabbed at the NEC adjudicator contract document, in particular at clause 2.3 therein. This clause wails at the adjudicator that they can seek whatever help they consider necessary from others but must pipe up and say so – and then, once this little helper helps, the adjudicator must provide the parties with a copy of any information or advice from others and write their comments on it. 

Well, that’s all a bit of a nuisance, say some of us adjudicators; so instead of seeking out a little helper we do everything by ourselves. Whether that costs more on the fee account is a moot point, but it’s better than diving into a rigmarole of obtaining help then doling out the results and inviting submissions from all parties. That costs oodles and uses oodles of days.

But the adjudicator in this case thought he had trumped that NEC clause. His terms of appointment said: “If I require quantity surveying input […] I can do so at my absolute discretion and I will not require the consent of the parties.” Be that as it may, his terms did not say “and I need not tell the parties what sort of help I got”. 

For goodness’ sake, be realistic. That NEC clause 2.3 is very well understood by us adjudicators

The party taking issue asked the adjudicator what his QS helper helped with. Oh, he said, it was clerical and administrative stuff, checking calculations, compiling a Scott schedule, proofreading – all handy helper stuff. The label pinned on all this by the complainant was “an opportunity has been afforded for injustice to be done”. So they called on the court not to enforce the award and instead to order a trial into the precise nature of the services by the QS, to determine whether some unfairness, disadvantage or breach of natural justice had arisen. That stopped the enforcement in its tracks. 

For goodness’ sake, be realistic. That NEC clause 2.3 is very well understood by us adjudicators. If an adjudicator requires, say, legal advice then he or she is 100% free to take the advice, but tell the parties about the conundrum, tell them who you’re going to for the advice, and tell the parties what advice is given. Then a party can shout “rubbish” from the gallery at the advice. The same goes for the adjudicator who decides expert advice is needed. JCT expressly gives the green light to the adjudicator to appoint an expert if the technicalities are on the edge of his or her experience. 

That NEC clause is not meant to torpedo an award if a little helper is brought in to help on an everyday basis. And given the awful state in many adjudication cases of bundles of bent and buckled lever arch files, none of which is cross-referenced to the narrative, a little helper saves an awful lot of rummaging to avoid a fed-up adjudicator. The NEC clause is too loose, vague and open to be fired at. I repeat: be realistic.

Brief reasons will suffice. How come? It’s because adjudicators’ decisions do not finally determine the rights of the parties

There was a second point in the enforcement proceedings: how deep does “giving reasons” have to go to explain the decisions of the adjudicator? The judge was completely realistic about what should be expected in 28-day adjudication. Hint: it is not the same as is expected from a judge or an arbitrator.

The party who complained said that he “was entitled to know why the adjudicator had decided the matter the way he had”. He said the adjudicator had neither explained the basis upon which he had arrived at the final account figure nor said why he preferred the opponent’s story; and he didn’t explain his calculations.  

Previous cases have made it clear that the court should allow considerable leeway in relation to adjudicators’ reasons. Brief reasons will suffice. How come? It’s because adjudicators’ decisions do not finally determine the rights of the parties. And in any case, if reasons are given, and they prove to be erroneous, that does not generally enable the adjudicator’s decision to be challenged. Add to that the fact that adjudicators often are not required to give reasons at all … it saves a great deal on adjudicators’ fees; and the costs of paper too. Reasons need only be brief and need not deal with every point. 

“Adjudicator’s reasons are not to be judged by the standards applied to judges or arbitrators,” said the judge in Babcock. “A reasonable person informed as to the context of the dispute who reads the decision ought to be able to discern from it what the adjudicator has decided and why he has decided it.” That’s an important viewpoint. Take on board as well the observation of Mr Justice Jackson in Carillion vs Devonport: “Reasons should be sufficient to show that the adjudicator has dealt with the issues recited to him and what his conclusions are on those issues.” Brief reasons will be enough.

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