Adjudication may be a bit rough and tumble but the process must maintain respect

Steven Carey

Adjudication can be pretty rough and tumble. The question is how rough do you get before the courts step in and shout “enough”, especially when one considers the non-interventionist policy adopted by the courts.

Those representing parties in adjudications come from diverse background and disciplines and some, to put it bluntly, can engage in “sharper practice” than others. One of the tactics that the referring party may try to use to their advantage is to get appointed a favoured adjudicator or, at the very least, seek to avoid one who is perceived as potentially being unsympathetic to the client’s case. The practice has developed over time with certain advisers to parties in adjudication engaging in “adjudicator shopping”.

An example of this that came before the courts was Lanes Group PLC vs Galliford Try Infrastructure Limited. Galliford Try asked the Institute of Civil Engineers to nominate an adjudicator, but dropped the referral only to issue a fresh notice of adjudication and get a new adjudicator appointed. Apparently, Galliford Try had abandoned the first adjudicator because they had had previous dealings with him and believed he may be biased. The Court of Appeal held that that while “forum shopping” was undesirable, Galliford’s conduct was permissible under the contract and the second adjudicator did have jurisdiction.

More recently, the case of Eurocom Limited v Siemens PLC looked at another instance of this. In a first adjudication, Mr Molloy, a respect adjudicator, found in favour of Siemens. Eurocom, through its representative Knowles, over a year later applied to RICS for the appointment of an adjudicator for round two.

One of the questions on the nomination form was whether there were any adjudicators who would have a conflict of interest in the case. Eurocom listed Mr Molloy in this category along with a fairly long list of other potential adjudicators. Dutifully, RICS appointed another adjudicator outside of the list but failed to copy the adjudication form to Siemens. A decision was made in Eurocom’s favour. Siemens resisted Eurocom’s enforcement proceedings on the basis that the adjudicator’s appointment was invalid due to the information provided to RICS in the nomination form and because RICS failed to raise the conflict of interest with Siemens.

Parties are not able to influence the appointment of a judge by simply withdrawing a claim and resubmitting until they get one to their liking, so why should they be able to do so with the appointment of an adjudicator?

Eurocom tried to argue that the “conflict of interest” list was used as a means of stating adjudicators they would not want appointed and inserted the words “we would advise that the following should not be appointed”. The court held that there was a strong prima facie case that the representative completing the form had “deliberately or recklessly answered the question as to whether there were conflicts of interest so as to exclude adjudicators who he did not want to be appointed” and therefore had made a fraudulent representation to RICS as the adjudicators listed did not have a valid conflict of interest. However, it did not consider the fact that RICS had failed to provide the form to Siemens as a breach of natural justice, although it is thought that it would be good practice for RICS to do so.

Whilst in adjudication it must be accepted, given the timeframes, that justice may at times be rough and ready, one does not want the adjudication process to fall into disrepute; the process needs to be respected and not abused. The decision in Eurocom vs Siemens does not, of course, prevent a referring party from withdrawing a referral, but the nominating body should be bold and simply re-nominate the adjudicator it initially nominated in the absence of any valid reasons proffered as to why it should not do this. It may be bolstered in this regard by the alternative ground held by the court in not enforcing the second adjudicator’s decision, namely that a referring party should not subvert the system of nomination.

The nominating bodies should bear the responsibility of ensuring that the nomination process remains fair and it would be surprising if it does not become the standard practice for all nominating bodies to provide the responding party with a copy of the nomination form. Parties are not able to influence the appointment of a judge by simply withdrawing a claim and resubmitting until they get one to their liking, so why should they be able to do so with the appointment of an adjudicator? I suspect that this decision may put a dampener on those representatives who engage in “adjudicator shopping”.

It goes without saying that parties should answer the questions on the nomination form fairly and honestly and only identify adjudicators who have a genuine conflict of interest.

Steven Carey is partner in the real estate, construction and engineering team at Charles Russell Speechlys