Get lost, creep: Adjudication

Mr Justice Coulson said, “I have firm views on this topic.” What topic? White vans. They trundle up to the adjudicator’s doorstep with 40 lever arch files marked “with the compliments of the referring party”. And then, within a week, another white van arrives with 50 or so files marked “with the compliments of the responding party”. The judge said, “The dispute, because of its sheer size, may well not have been appropriate for the summary adjudication process.” He said all this in a very recent case, Enterprise Managed Services vs Tony McFadden Utilities.

This dispute came out of one of those utilities contracts; the sort where deep and meaningful relationships end up in deep and meaningful rows. This one was about water mains and the parties had got into all sorts of hot water about novation and assignment, and the court said it was not on to attempt to sort it out with an adjudication. It stopped it in its tracks. All very technical and interesting, but Mr Justice Coulson would have stopped this one anyway, on the grounds of fairness.

Let me explain. The adjudicator has to impartially and fairly decide a dispute within 28 days, or more accurately, “within the time limit prescribed by the Construction Act”. So, said the judge firmly, if he can’t then he ought to resign. Mind you, as was said in the case of CIB vs Birse, “the adjudicator can only reach a decision if (a) he has sufficiently appreciated the nature of any issue referred to him, and (b) he is satisfied that he can do broad justice between the parties”.

The broad justice test is inherent in this adjudication procedure. It follows, dare I suggest, that if an adjudicator reaches a conclusion that he cannot do (1) broad justice, and (2) reach a decision impartially, and (3) fairly, and (4) within the time prescribed by the act he has to resign. Lots of ifs here.

Credit: Simone Lia

Then there’s the problem of creep. The judge doesn’t approve of it. He said, “Piecemeal extensions (of time) in large and paper-heavy final account disputes are not what adjudication was designed for … The enthusiasm of some adjudicators to permit ‘creep’ in these cases should be curbed.”

Well, let’s have a look at what happens in the actual world of adjudication. Creep is rife. And, I tell you this; a large, paper-heavy final account can be done in 28 days (justly, impartially, fairly) if and only if the parties are not permitted to creep.

Let me tell you how creep happens. For a year or even two before the adjudication, the parties have been dancing, fencing, sparring. “Here is my final account,” says Tom. Silence from Dick. “Hey-ho,” says Tom, “what’s up?” Dick eventually replies asking for “justification” of this or that variation, loss and expense and more besides. The ball goes to and fro over the net. Then Tom gets fed up. He gets consultants and lawyers to prepare the referral. The lever arches include a whole pile of evidence, submissions and calculations that Dick’s never seen before. Creep. And don’t be surprised when the dispute that had well and truly crystallised before the adjudication is improved, glossed and refined no end by the time that white van brings the response. That’s creep!

What now? Should adjudicators say, “not permitted” and throw out the new stuff? Should they compile their award from referral and response, stripped of the new stuff? Should they resign? No, what happens is that there is a reply to the response. Why? Because it would be grossly unfair to refuse to let the other party give an answer to the new stuff. Then the other side will want to give an answer to the answer. As for the adjudicator, they have to wait until the creep stops before they can do their business.

Mr Justice Coulson hit the nail on the head. When the arguments before the adjudication become the only arguments in the adjudication, I guarantee a decision by day 28 – even before. When new stuff is included, it stymies the summary process. And let me tell you this: whether you play two or seven sets makes no odds to the adjudicator; the adjudicator adjudicates when the ball stops toing and froing; all he needs is a fair time to, at last, adjudicate.