The ugly duckling test

Do you remember the adjudication case last year called Carter vs Nuttall? It is the one where the court would not enforce the adjudicator's decision because the arguments and assessments in the referral were not those that had featured in the build-up to the adjudication (Tim Elliott wrote a piece about it on 12 April last year, and there was a chat room article about it on 24 January this year).

The fear was that the responding party might be ambushed. Fair enough.

Now let me tell you what happened in Dean & Dyball Construction vs Kenneth Grubb Associates last week. The judge was told that the referral contained facts and arguments that were different from those that had featured in the period prior to the adjudication.

This time the judge said he would enforce the adjudicator's decision. Sounds odd? Bear with me; it's fair enough, too.

Let me try to explain the reality of adjudication.

I claim £20,000 for variations, you reply by saying "go away". That is a dispute, which can now be taken to a referee. The trouble is that when I compile my referral, my claim for £20k has turned from an ugly duckling into a beautiful swan. My referral file is choc full of argument, commentary, law, evidence and the kitchen sink, hardly any of which the responding party has seen before. A label is stuck to the kitchen sink, hoping the respondent is having a nice Christmas holiday in Peru, with no chance of dealing with this lot. I don't joke: this happened last Christmas! And don't think it doesn't happen the opposite way.

And then, oh dear then, the referring party screams out to respond to the reply, and then the respondent screams out to reply to the response to the reply.

On day 27, the adjudicator panics, tosses a coin and goes home. None of this will do. But it is happening time and again

By now it is day 27 of the 28-day game. Then the adjudicator panics, tosses a coin and goes home. None of this will do. But it is happening time and time again.

The lesson we learned from Carter vs Nuttall was that the adjudicator could dismiss a referral that contained fundamentally new argument and assessments. I suppose that the same test must apply for a response document. What is sauce for the goose is sauce for the gander. Nobody can ambush the other.

All this is very well if it is obvious that a party is putting up brand new arguments. But sometimes a document contains facts and arguments different to those canvassed in the pre-adjudication stage but which fall short of what would cause the complete ousting of the case or response. That seems to be the difference between the Dean & Dyball and Carter cases.

I don't like the phrase "it's a question of fact and degree" because it's a cop-out, but I suspect the difference between the two cases is as vague as that. Perhaps we could use the test mentioned in another recent case: JW Hughes Building Contractors vs GB Metalwork. In this a new document came to light halfway through the adjudication, which the adjudicator let in; the judge asked if the builder had been put at a "significant and unfair advantage"? The answer was no. So the decision of the adjudicator was enforced.

It seems an adjudicator can reject ambush material from either side when it is, in effect, a new dispute. As to new facts and matters which are not so fundamental, it seems right to consider whether the other party is put to a "significant and unfair disadvantage" if they are let in. This is in essence a "fairness test" as distinct from a "new dispute" test.

There is one other important aspect. It concerns the adjudicator's time. It is ever so dangerous to stop or delay the referee.