No messing north of the border

“No, no,” cries the aggrieved representative of the adjudicating party.  “This procedure is unfair; your award, Mr Adjudicator, will never be upheld.  You will have broken the sixth seal – there will be a great earthquake, and the sun will become as black as sackcloth, and the stars in the sky will fall to earth as a fig-tree casts its unripe figs when shaken by the wind, and every mountain and island will be moved out of their places … All because you, Mr Adjudicator, are being unfair.”  “Oh buzz off,” says the adjudicator, and so does the court.

I like this case: high level too. The three members of the Court of Appeal in Scotland gave ever such short shrift to complaints of unfairness in adjudication. And, it’s not just a whistle of disapproval in the case of Charles Henshaw & Sons Limited vs Stewart & Shields Limited, it is a belter of a message about wasting everyone’s time and money. It says: “The adjudication procedure ought not to be derailed by the pursuit of technical legal arguments, particularly where those arguments are patently without merit.” 

That’s precisely the message given previously by the Court of Appeal in England too. I will tell you about the case in a moment. Let me say this in passing. It takes a great deal of experience as an adjudicator to let these whinges about unfairness run off like water on a duck’s back. They all have to be considered and investigated and that goes on the bill.  Some adjudicators will be intimidated; some will become annoyed. Some representatives will lose the trust and confidence, which any tribunal is entitled to hold. 

Let’s have a referendum: ‘Should Scotland be an independent country?’ becomes ‘should these different glass sizes be part of the original contract?’

Charles Henshaw & Sons Limited was the main contractor for building works at the Gartnavel Royal Hospital Chapel, Glasgow. Stewart & Shields was their subcontractor for windows, curtain walling, roof-lights and canopy.  A modest £33,565.00 in an interim account was wrongly unpaid said the subcontractor. They called for the adjudicator. In this one, it starts to get expensive almost immediately, especially for the main contractor defendant. That party argued on day three that there were 10 reasons why the adjudicator should clear off. That 10 technical points on a £34,000 dispute is going some. The adjudicator has to analyse, take seriously, and spend time and pounds investigating.  He said “buzz-off”. (Although very professionally put in an award) He then went on and found all the money was payable and ought not to have been held up. But the award was not honoured.

Enforcement proceedings came on in the Sheriff’s Court.  The argument was the same ten points. They failed again. So they tried again in front of the Sheriff Principal. They failed again.  So they tried again in the High Court of Appeal called the Inner House. They failed again. Do you see what’s meant by time and money?  I guess by now, the £34,000 dispute is well and truly trumped by legal fees.
These technical points about there being no right to adjudicate are, by and large, all under the heading that the disputed works did not amount to works “under the contract”. That contract had a provision regarding the size of the glazed screens. It said that “any variations would be subject to a re-quote”.  Well, said the technical argument, that means any of those that cropped up (and they did) were out with the original contract. That’s a lawyer’s technical playground and worth a punt, perhaps. 

All of this in and out of court and instructing top class barristers is not to argue the substantive dispute. It’s merely to argue that the adjudicator had been unfair to decide the dispute. The contractor didn’t want to obey the adjudicator’s award (pay up the £34,000). These folk are in the trenches, dug in. Never mind all that, what do you make of the argument that this contract didn’t allow for variations (it didn’t) yet there were different glass sizes needed?  Let’s have a referendum: “Should Scotland be an independent country?” becomes “should these different glass sizes be part of the original contract?”  I bet the “Yes” vote comes from the real people in the building world and the “No” vote comes from lawyers, on a bad hair day. Well the only voters here were the three judges in the Court of Appeal, and they voted yes. Things in a building contract such as glass sizes are inherently provisional. This turn of events was not so different as to be required to be classed as other than part of the original contract works.  They were at variance but not full blown variation. So pay up the £34,000.

The big message for representatives: “It must be recognised that it is only in a very limited class of case that the court will refrain from enforcing adjudicator’s determinations.” 

The message too is that the inbuilt fairness in the system is that if either party doesn’t accept the outcome of the adjudication, it is wide open to litigate where matters are considered afresh.  Mind you the doors to that Ritz are also wide open. All you have to do is go in and pay.

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