There once was an ugly duckling

The adjudicator on this dispute had no doubt that the contractor was entitled to further time. He had bumped up the extension from 21 days to 119. He then gave the contractor a thick ear about its loss and expense claim for the prolonged stay on site. His award said: “I consider the claims made to be extravagant and exaggerated … I do not dispute that some claim over and above the £40k may be due (already paid) and I would grant the contractor leave to pursue this via a further adjudication if it so wishes.”

Hmmm. I confess I have never heard of that approach before. An adjudicator doesn’t have the power to give leave to bring a matter to a future adjudicator, instead of deciding it themselves. Put it this way: if the claim document served up in the adjudication is something of a pig’s breakfast, then the adjudicator should announce that it fails. The adjudicator isn’t there to turn it into a tasty brunch. The fellow was being ever so helpful. He was helping the party who was about to get nothing at all, to get upwards of £294,000. And if you were on the other side of all this, you would be mighty peeved, wouldn’t you.

If the claim served up in the adjudication is something of a pig’s breakfast, then the adjudicator should announce that it fails. He isn’t there to turn it into a tasty brunch

Paddison Construction had undertaken the building of a community centre at Handsworth for Birmingham council. An extension of time and a loss and expense debate came to adjudication. And because of the “giving leave” remark in adjudication, Paddison reshaped its loss and expense document and took it to a second adjudicator, the experienced Paul Jensen. My guess is that once Birmingham baulked at this second bite of the cherry Mr Jensen nudged the parties to ask the court if the first adjudicator was right to do what he did. The Birmingham construction court moved to consider the matter at high speed.

"Stop reading him that story! You're giving him false hope."

The judge decided that adjudicator one had made a decision about the loss and expense claim. The adjudicator had decided that, as it stood, it was exaggerated and had said in his award: “I am not prepared to grant any further money relating to the contractor’s loss and expense claim.” The judge said it was “misguided” to include the comments about pursuing another adjudication.

It may well be that this kindly adjudicator thought his job was to go gardening … weed out the rubbish

The court’s analysis is helpful. The heart of this adjudicator’s position is that on the information before him, he would award no money at all. The claim as it stood was, he said, “nothing other than an attempt to claim as much as possible on the proviso that they may achieve some success if not all their claim”. Those sort of cases are easy to adjudicate: they fail. It may well be that this kindly adjudicator thought his job is to go gardening … weed out the rubbish. But that’s not what it is to adjudicate. The adjudicator decided the claim was not proven … as it stood. He couldn’t now send it away for the ugly duckling to be turned into a pretty swan.

The judge went on to give further helpful guidance. If, and only if, an adjudicator decides it is not possible to reach a fair and impartial decision on a complex issue, the adjudicator is entitled to make no decision at all. But the adjudicator is expected to warn the parties immediately. Why? Because they are then at liberty to award more time to consider the complex issue. That’s not the same as telling a party that its claim is hopeless. Being unable to decide a complex issue is the opposite of deciding it is duff.

Paddison tried another argument to get the second adjudication going. It argued that the reshaped loss and expense document in adjudication two was not the same or substantially the same as previously; but the judge saw through it. It was, in truth, a new document making good the shortcomings of the earlier claim application. The grounds for claiming costs of prolonged stay on site were precisely the same as before. It would not get past the “substantially the same” rule if the improvements were, say, new evidence or an expert report. It would be hard if a poorly argued claim for loss and expense or a particular extension of time could be the subject of another adjudication simply because it was put together in a more sound way. That is not to say a claim for a different type of loss and expense or different ground for extension of time could not be brought again. So the real test for whether a dispute has already been decided is to see if the pig’s breakfast is now mutton dressed as lamb, if you see what I mean.