Burrell was the construction manager in charge of a project in Glasgow. Ballast was appointed management contractor under a standard JCT contract. So far, so normal. The dispute itself was nothing special; it was simply that the two firms were at odds over the value of the work Ballast carried out. But read on.
Ballast called for the adjudicator who said that, in his opinion, the dispute could only be resolved by agreement or by alternative dispute resolution.
Now, that non-decision was a "decision" in legal terms, which means it is binding. Ballast was still in a mess that couldn't be resolved until it could get an answer to the question "what are we owed?" So it went to the court and asked if it could go to another adjudicator. Yes, said Lord Reed of the Scottish court, go right ahead.
Now, let me tell you that this judgment is one of my favourites. The reason for this is that Lord Reed had seized what he saw as an opportunity to explore this "new kid on the block" called adjudication. He decided to address the entire issue of the right of the courts to interfere in the construction industry's system of settling disputes in 28 days flat.
Clearly, adjudicators want to know how willing courts are to interfere with their decisions; they want to avoid getting a poke in the eye. All you folk defending an adjudication will also be keen to know; you don't want a poke in the eye either.
Before this case, the debate on interfering judges had focused on fancy words and phrases such as "jurisdiction", "natural justice" and "want of impartiality". Clever lawyers have always come up with ingenious arguments along these lines to try to persuade judges to interfere with, void, or blue-pencil adjudicator's decisions. But the judges are generally reluctant to interfere, because the Construction Act says that an adjudicator's decision, notwithstanding its provisional nature, is binding until finally decided in arbitration or litigation.
If the actual process of getting to an adjudicator’s decision is ‘unjust’, the court will step in and stop it
Lord Reed considered this, but said: "It does not appear to me necessarily to follow [from the act] that adjudicators' decisions were intended to be entirely immune from challenge.
"The law does not dispense with judicial protection, although it is likely to place limits upon it. It also appears to me to be necessary to remember that, although both parties to the contract undoubtedly have a strong interest in the immediate enforceability of an adjudicator's decision, they also have an interest in being protected against decisions that are unjust."
Yes, yes, yes, to that last line. The Construction Act didn't, and wouldn't, impose on the construction industry, nor did the industry ask for, an unjust dispute management process.
Lord Reed went on: "Notwithstanding the intention that adjudication should be an expeditious procedure rooted in commercial common sense, I would be slow to insist that the adjudicator's decision should always be binding, notwithstanding possible errors of law, procedural unfairness or lack of consideration of relevant material submitted to him by the parties."
Therefore, if the actual process of getting to an adjudicator's decision is "unjust", the court will step in and stop it. If the adjudicator makes a wrong decision about the facts, or a wrong decision about the law, the court will bind the parties to it if the method or process of reaching that wrong or daft decision is "just". But if, say, an adjudicator allows an ambush (that is, arguments unheard before, unexpected witnesses, last-minute experts' reports and so on), the process is unjust, and the court will intervene.
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on email@example.com.