Parties in a dispute set all sorts of rules and try all manner of tactics on each other, but adjudicators need to resist the temptation to join in the game
There were three points that emerged in the case of Primus Build vs Pompey Centre. The first was a technicality about the proper way to serve a notice of adjudication. The second was about the adjudicator having a brainwave, but not telling the parties. The third was a reminder about the costs of quarrelling.
Let’s deal with the first. Improper service has forever been a playground. “Oh,” says the defendant, “you might have a good case against me, but you can’t litigate, adjudicate or arbitrate, because the starting rigmarole in the contract hasn’t been followed.” This is the bit in the contract that says: “You must issue the notice of adjudication by taking all your clothes off and running three times around the table in our reception, muttering a magic code word.” Of course, nobody does follow this rigmarole.
Pompey’s contract with construction manager Primus, said that if either party were minded to adjudicate, then the notice of adjudication had to come either by fax or by personal delivery. Primus did issue a notice, but it was by post. Then there was a whole pile of money spent arguing about proper and improper service. Daft!
Daft, because this type of tease can be trumped ever so easily by the adjudicator. All they have to do is resign, then let the process begin again using the correct rigmarole. The same adjudicator will get the job. A few bob and a few days will be lost – that’s all. So all you adjudicators, please use your loaf when you come across technical challenges. The challenger is hoping you will not resign. Then if it loses it can trot out the technicality and stymie the result. Tactics, old chap, tactics.
For the record, the technical challenge failed. There is, if I may respectfully say so, a brilliant barristers’ argument explaining why something popped in the post is, in law, a “personal delivery” or more accurately complies with the requirement that something “shall be delivered personally”. All lawyers would agree with the neat explanation. So, the adjudicator was right to press on, but I say he should have bloomin’ well stopped and played safe.
The second point is a lesson adjudicators need to be reminded of 52 times a year. Your job is to umpire. You umpire the two parties’ game. It’s their game, not yours. It is so easy to suggest that the bowler aim a little more towards the off stump, since he has a fielder in the slips. Time and again the adjudicator will spot an argument not being run.
This happened between Primus and Pompey. A large chunk of fees had been lost by Primus when Pompey omitted a large chunk of office block. Primus held its hand out for the 3% due. The adjudicator awarded it 1.3%. He got to that by calculating for himself the profit-to-sales ratio identified in Primus’ accounts. Snag is, it was not a percentage expressly stated in the accounts. When Pompey saw the award, it complained. It said neither side had put its case that way; worse, it had been given no opportunity to deal with the umpire’s bright idea. The complaint went before a High Court judge.
In these 11 years of adjudicating you might expect that this sort of problem has previously arisen. It has. Losing parties do not send bouquets of flowers to adjudicators who thought of something nobody else had. It’s not unlawful for the adjudicator to do so, but the law does require the them to give a hint of their bright idea. So, if you must help one side or other to lose, do give an opportunity for them to argue with you. As for Pompey and Primus, the court said the process was unfair and struck down the award.
The third point is all about wasted costs. This adjudication was a waste of time and money. The judge sends a message to all of us to think carefully about the intended adventure before we begin. Think about which way things might go, twists, turns, tactics, manoeuvres, moods, spite and
people. Estimate time, money and frustrations. In other words, in a dispute, do exactly what you do when embarking on a building, road, or railway. Guess which way it will go, then don’t be surprised when it goes somewhere else. The alternative is to not get out of bed …
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple
Original print headline: 'It's all in the game'