PC Harrington vs Systech: Fair game

According to the Court of Appeal, a couple of weeks ago in PC Harrington vs Systech International, the judgement I mentioned last week, silence has an obvious meaning. There is complete silence in the Construction Act and the Scheme about paying the adjudicator for non-enforceable awards. But then there are a load of noisy unlesses. So, without the unlesses, the obvious intention of the silence, says the court, is that nothing gets paid to the adjudicator. Right?

Have we got other silences in adjudication? Try this one: the act and Scheme are silent about adjudication being a dispute “resolution” system. I can’t find the word “resolution” at all. The word was there once, I saw it. Parliament put it in. It said: “A party to a construction contract has the right to refer a dispute arising under the contract for resolution.” Then one day the word “resolution” disappeared. It now says: “A party to a construction contract has the right to refer a dispute arising under the contract for adjudication.” So the obvious intention of parliament is that it is not a dispute “resolution” system.

There is also a complete silence on any general duty of the adjudicator to “act fairly as between the parties”. Nor does it get anywhere near saying the procedure adopted by the adjudicator is to provide a fair means for the resolution of the matters falling to be determined. The only noise in the Construction Act is to act impartially and, as the Scheme adds, “avoid unnecessary expense”. The absent words are not, repeat not absent, from the adjudicator’s big brother arbitration. That act demands the arbitrator to act fairly (as well as impartially) and all that other stuff about a fair hearing. Don’t tell me that when parliament was inventing adjudication all that requirement of fairness slipped their mind. Tosh! Parliament left it out on purpose. Right? Impartiality is there in broad daylight in the act and in the Scheme but no other types of natural justice or fairness shouts from the Construction Act.

The Court of Appeal deprived the adjudicator of his fees in the PC Harrington case because it was decided that he had breached the rules of natural justice and thus the award was unenforceable.

Don’t tell me that when parliament was inventing adjudication all that requirment of fairness slipped their mind. ToSh! Parliament left it out on purpose

Harrington’s ground-worker subby came to adjudication for its retention fund. PC Harrington ran a defence in the adjudication that the adjudicator must first decide the size of the final account. The adjudicator said the defence was inadmissible because no dispute had crystallised until halfway through the retention adjudication. He wouldn’t let it in. Unfair? The act is silent on unfairness. Actually it sounds more like he made a decision as to law. He declared no dispute had arisen in law, and decided in law the defence is inadmissible.

On top of all the silence there is an awfully big noise in the Scheme about “considering any information submitted to the adjudicator by any of the parties” and giving the adjudicator the option of deciding or not any other dispute which, “he considers is necessarily connected with the dispute” already referred. PC Harrington brought what it said was a dispute about the final account and said it was connected to the retention dispute. The adjudicator wouldn’t take it on board. Isn’t that what the Scheme says he can do?

By the way an adjudicator under the Scheme can resign and get paid “where a dispute varies significantly from the dispute referred to him in the referral notice” provided he decides he is “not competent to (then) decide it”. He can’t tell a fib and resign but he can decide he will not take it into account. Is this all getting complicated? Blame parliament. But you do agree parliament thought about all this, however clumsy it all is? That’s why I am confident it had no intention of imposing the sort of fairness seen in arbitration.

Adjudication is a rough and ready procedure - errors of fact and law and procedural mishaps are binding. Mistakes are to be expected. What do you expect? It’s a system where an outsider only decides who will have the benefit of the money until sorted out later. So stop dragging this break-neck speed affair into some form of high-fallutin dispute resolution system. It’s not. Nor is it fair. It’s about ‘pay now and argue later’.

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