From a purely practical perspective, the decision to uphold the adjudicator's award is unsurprising. Sweeney, the subcontractor, had submitted an interim account for payment. By the time the adjudication was finished there was no dispute that the work had been done (some months before); there were no remaining disputes on rates or quantities, no contra-charges, no counter-claims. The subcontractor had, nevertheless, not been paid. Whether one loves adjudication or loathes it, it is difficult not to see that that this situation is exactly the kind the legislators had in mind when they brought in the process.
If that is correct, an adjudicator's decision ordering payment should come as no great surprise. By logical extension, rejection by the courts of an attempt to get them to interfere with that decision is also no shock. The poignant note that the subcontractor, Sweeney, went into liquidation before the appeal (in fact, between the decision of the judge at first instance and the date of the appeal court hearing) and that court timetables meant that the appeal was decided almost exactly two years after the date the work in question was completed (with the amount ordered to be paid by the adjudicator still unpaid, so far as is known), almost writes the argument for those in favour of adjudication and a "hands-off" attitude to the process in the courts.
The principal argument for Karl Construction on appeal was that, although the referral documents entitled the adjudicator to proceed as she did, the "dispute" had become differently identified in later correspondence. The court held that the "dispute" had to be identified in the referral documents – even if it was wrong in that the adjudicator was obliged to apply the law as she saw it and could not be circumscribed by agreement of the parties.
Tony Bingham's main concern, however, seems to be with the rejection of Karl's argument that the adjudicator must come back to the parties on new points before deciding the case. That was the subject of a short submission from Karl, there being no appearance for Sweeney's liquidator. Not surprisingly, the court's discussion of the issue is brief. It is relatively easy to support the argument that it would be helpful to parties if adjudicators did allow parties an opportunity to comment. It is less easy to advance the view that, as a matter of law, they are obliged to do so. The rules of natural justice developed in the context of an adversarial system must adjust to, and be viewed in, the context of the structure of the stripling process (including the timetable for decision-making and the wide powers given to the adjudicator by statute and regulation).
The adjudication agreement in the Karl case had allowed the adjudicator to "set his own procedure and at his absolute discretion … take the initiative in ascertaining the facts and the law as he considers necessary".
When the appeal court (the Inner House) said that the adjudication process was one far removed from the traditional adversarial format adopted in the courts, it was saying nothing that has not been said many times by the courts before.
It may make life uncomfortable for lawyers to have to adjust to a fundamentally different approach as the stripling grows rapidly, suffers the inevitable growing pains and makes its own mistakes, but few will lose sleep over that. In today's legal world, the one certainty is change and the need to adjust to it.
Postscript
McGrigor Donald appeared for Sweeney at first instance.
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