The practice of ‘forum shopping’ as mentioned in Tony’s article may be unappealing to some, but any attempt to legislate against it will cause a trolleyful of problems

Tony Bingham does not like “forum shopping”. There will be many readers who will concur with his views. There will also be many others who will not readily see the “problems” associated with so-called “forum shopping”. The Court of Appeal decision in Lanes Group vs Galliford Try Rail will, clearly, be provocative. However, from a legal practitioner’s perspective, one wonders whether the case really adds anything new to this area of adjudication?

There does not appear to be any evidence that ‘forum shopping’ is a problem

Lanes argued that there ought to be a term implied into the 1996 Construction Act and the Scheme such that a referring party lost the right to adjudicate if it deliberately and without good reason failed to serve a referral document later than seven days from the date of the notice of adjudication. The concepts of the referring party acting “deliberately” and/or “without good reason” tend to the inference that the referring party is, in fact, “forum shopping”. The court was clear: “The proposition that a claimant can allow an adjudication to lapse because it disapproves of the appointed adjudicator and then start a fresh adjudication before a different adjudicator is not an appealing one”. However, the court was equally clear that there is no scope for such an implied term in circumstances where the 1996 Act/Scheme and indeed the relevant Institution of Civil Engineers form of subcontract makes express provision for a party to restart the adjudication prior to the issue of the referral documents. Furthermore, it is difficult to argue against the court’s view that “if such an elaborate provision were to be implied, an expensive factual investigation would be required in some cases in order to determine whether the claimant had or had not lost the right to adjudicate.” In practice, one can envisage situations where a responding party keen to frustrate the process argues that the referring party has acted “deliberately” and/or “without good reason” such that the court is required to intervene and decide the various questions of fact. Such scenarios would lead to increase in costs, more intervention by the courts and defeat the policy of providing a speedy and “rough and ready” procedure.

Standing back a little, while most are keen to voice a moral/professional objection to forum shopping, there does not appear to be any data or tangible evidence to show that this issue is, in fact, a significant problem requiring correction by judicial intervention. There is a further practical complication in that, often, a responding party may not even be aware that the referring party has decided against referring the dispute to the adjudicator first nominated by the relevant adjudication body. For example, what if the referring party rejects two adjudicators but is still able to “accept” the third and provide the referral documents to that (third) adjudicator by the due date? Equally, what of the situation where the referring party does not offer any reasons as to why the first adjudicator is not to be used - how would the responding party be able to show that this was deliberate or without good reason? Indeed, just as Tony offers a tip to adjudicators in the context of provisional decisions, one wonders whether unhappy referring parties would, now, decide not to provide explanations (as did Galliford Try) when seeking not to refer the dispute to the “unwanted” adjudicator, electing instead to simply allow the time period lapse before issuing a fresh notice of adjudication. As the court recognised, there may be any number of reasons why a referral document has not been issued on time and, in practice, a responding party can often benefit by the additional time. Further, it is difficult to see the prejudice to a responding party - ultimately it will need to respond to the referral document (which is often very similar to the notice of adjudication) and the fact that the referral will be later than expected does not itself prejudice the responding party.

As Tony says this case further strengthens the message that the courts consider adjudication to be a different procedure from litigation and arbitration and one needs to be mindful that the courts consider “the adjudicator [can] fashion his procedure in whatever way enables him to discharge his onerous duties most swiftly, effectively and fairly” unless “the complainant’s case is clearly made out”. Strategically, parties unhappy with the adjudication process and/or the decision ought to consider more formal methods such as arbitration or litigation if a more rigorous approach is really required.

Hamish Lal is a partner at Jones Day