The dispute concerned damage to glass that Sir Robert McAlpine had installed at the Caspian Point office development in Cardiff. McAlpine blamed its subcontractor, Pring and St Hill. Through an adjudicator, McAlpine obtained an award of £123,456. Pring then started an adjudication against its own subcontractor, Southern Erectors, blaming it for the damage and seeking to pass on the claim. However, Pring also blamed another subcontractorJC Howell, for the damage, and started an adjudication against it as well. The adjudicator in the dispute between McAlpine and Pring was also appointed in the adjudications between Pring and Southern Erectors and between Pring and JC Howell.
Southern Erectors objected strongly to this. Its solicitor wrote to the adjudicator saying there was a risk of a breach of natural justice if he now acted in the Pring/Southern Erectors adjudication and in the Pring/Howell adjudication. If he acted in three separate adjudications about the same matter, there was a risk that information gained in one might influence his decision in another, and that that information might not be available to Southern Erectors. The adjudicator was asked to resign. He refused. He was then asked whether he was going to act as adjudicator in the parallel adjudication between Pring and Howell. He confirmed that he was, but said he would ensure that there was nothing in the two adjudications of which the parties were not aware.
There was a risk that the adjudicator would carry forward things he had seen and opinions he had made earlier
Pring won the adjudication, Southern Erectors declined to pay, and so a court action followed. Southern Erectors raised several matters in its defence. The first was based on paragraph 8(2) of the Scheme for Construction Contracts, which states: "The adjudicator, with the consent of all the parties to those disputes, may adjudicate at the same time on related disputes under different contracts whether or not one or more of those parties is a party to those disputes." It was accepted that the disputes between Pring and Southern Erectors and the disputes between Pring and Howell were related. Each was about the extent to which some breach of contract by Pring's subbie may have contributed to the damage for which Pring was liable to McAlpine.
The judge held that paragraph 8(2) gave a party an absolute right to object to having the same adjudicator determining related disputes. If a party did not consent to an adjudicator hearing both its own dispute and a related dispute, then the adjudicator simply could not do so, however sensible that course might seem. In addition, the judge held that Southern Erectors' objection had been entirely reasonable. The purpose of Pring's references to adjudication was to attempt to apportion responsibility among its subcontractors for the damages that it had to pay McAlpine. The adjudicator had already decided the dispute between McAlpine and Pring, and an attempt was going to be made to call into question that previous decision. In those circumstances, there was every reason for Southern Erectors to object and for its rights to be upheld.
Tim Elliott QC is a barrister specialising in construction at Keating Chambers.