Elanay Contracts did the shop-fitting work, but when it came to paying up, the price in the final account was higher than that in the original contract. Elanay said there had been variations. Vestry then compiled a list of alleged defects in the work. Elanay said there were no defects.
If all this were left to litigation to sort out, we would come back in a squillion months' time for the result. Instead Elanay called in its contract adviser, who in turn called in the adjudicator. It led, in due course, to a visit to the High Court in London and to counsel for Vestry arguing that the Human Rights Act, which was effective on 2 October, should torpedo the adjudicator's decision. The judge said the Human Rights Act did not apply to adjudication. He ordered Vestry to obey the adjudicator's decision and pay Elanay.
Vestry did not think that the adjudication had been a fair fight. It was, it said, disadvantaged because the principal person involved was at the bedside of his dying mother. Also, the procedure was upset owing to Elanay's late delivery of documents in the adjudication. In these sorts of circumstances, the adjudicator can extend the 28-day timetable by up to 14 days with the consent of the "referring party" – the party that starts the adjudication. Elanay was that party, but would only agree seven days. It is that element of perceived unfairness that persuaded Vestry to reach for article 6 of the Human Rights Act.
The snag is that judges and practising lawyers regard the adjudication process as outside of the legal system
The adjudicator made his decisions about the variations and defective works and pronounced that Vestry should pay £64 000 to the shop-fitter. It refused. So Elanay asked the High Court for summary judgment, since there was no defence to the adjudicator's decision on the issues put to him.
The argument to the judge was that article 6 of the Human Rights Act requires that "in the determination of his civil rights and obligations, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal". Vestry said that things moved too fast. It pointed to a phrase that cropped up in a the judgment of a case in the Netherlands, which explained the requirement of "equality of arms" for the purpose of a fair hearing in the sense of a fair balance between the parties: "Each party must be offered a reasonable opportunity to present his case, including his evidence, under conditions that do not place him at a substantive disadvantage vis-à-vis his opponent." The High Court judge in Vestry, Mr Justice Havery said, "The question is whether article 6 applies to proceedings before an adjudicator. In the first place, the proceedings before an adjudicator are not in public, whereas the procedure under article 6 has to be in public. I can see that problems arise over whether one refers to a decision as a final decision or whether one has to consider whether article 6 applies to a decision that is not a final decision. But it seems to me that if article 6 does apply to proceedings before an adjudicator, it is manifest that a coach and horses is driven through the whole of the Housing Grants Construction & Regeneration Act." He continued, "In my judgment, article 6 does not apply to an adjudicator's award or to proceedings before an adjudicator, because although they are a decision or determination of a question of civil rights, they are not in any sense a final determination. " Vestry was obliged to pay up, but given permission to go to the Court of Appeal and now awaits a date.
I have a tip for Vestry. It should have a word with barrister David Friedman or his colleague Sean Brannigan, the team representing one of the parties in the recent Court of Appeal case Bouygues vs Dahl Jensen. It was fully intended by their opponents to run human rights in the appeal, but it came to nought. And it must be fair to say that Vestry's chances are limited. The snag is that judges and practising lawyers regard that 28-day dispute-management process called adjudication as outside of the legal system. It is something that those peculiar construction folk have invented for themselves – largely based on who will have the benefit of the cash until the dispute goes to the traditional places. If this idea of self-regulation using their own referees sorts out the problem instead of coming to court, so much the better.
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or e-mail him on email@example.com.