Adjudicators who try to dig up supporting evidence where it is lacking are committing a grave error - and playing into the hands of their detractors
The annual question for this year Put by the industry think tank The Edge is "What is your dangerous idea?" Come on, we have to have a go at this. Do you remember last year's question? "What we believe but cannot prove?" I think I landed on the belief that some adjudicators tunnelled backwards from the decision they wanted to reach to the reasons for making it. This year I have landed on a really, really dangerous idea. "Let's make it law that adjudicators will only adjudicate."
What's this about? I will tell you about a case called All In One Building & Refurbishments Ltd vs Makers UK Ltd. These two were at odds about the pace of work by All In One Building & Refurbishments. So Makers and its contractor parted company. AIO issued an account for work done and a claim for £159, 000 damages. Snag was, Makers rejected the claim, which was what we call a "one-liner". That is, there was no evidence, no back up, just a shout for £159,000. Makers gave all that short shrift. Wouldn't you?
So AIO decided to bring the dispute to adjudication. When the adjudicator saw the skinny claim he said there was a "substantial inherent risk in issuing a decision on a £159,912 claim that had neither been properly evidenced nor tested". Some time later, a judge in the High Court was a tad more forthright. He said: "It's a matter of some surprise that he contemplated such a decision. If it was not proved he should have dismissed that aspect of the claim."
But he didn't do that. The adjudicator is a decent sort of fellow, a damn nice guy. If he had simply adjudicated what AIO was claiming, it would have been all over in two minutes. No evidence, no back up: no case. Instead, he poked his nose in. He asked AIO to put up evidence. And when that happens it is like lighting a blue touch paper. When new material comes in after the adjudicator is on board you can guarantee that the timetable will go to pot, the costs will go to the moon and those who would like to see adjudication torpedoed have a field day.
Look, 28-days is ample time "to adjudicate". Cheap, too. Even the big disputes are easy meat in 28-days. How come? By just getting the adjudicator to adjudicate, that's all. Let's say two companies, A and B, are at odds. Once they have finished shouting at each other, A calls for the adjudicator. AIO did. It complained that Makers wouldn't pay. All the adjudicator has to do now is to list all the quarrels then listen to all the arguments that AIO and Makers hurled at each other. And for each quarrel and pairs of arguments they ask, "Is AIO or Makers more convincing?" That's that.
But 28 days is hopeless and lunatic if A and B thinks the 28 days is there to "develop" their case against each other. The big, big difference between adjudication and litigation or arbitration is that in the latter two we spend 28 weeks and sometimes 28 months, "getting the case up" before the damn thing is adjudicated. The starting point in litigation is a moan by A. And do you know that some people play 28 day adjudication like that. But adjudication is a 28 day period for the adjudicator to adjudicate the extant arguments … meaning the ones on the table before the 28 days begins.
When new material comes in after the adjudicator is on board you can guarantee the timetable will go to pot and the costs will go to the moon
In the AIO example, the request of the adjudicator that it put in a better case was no doubt welcomed with open arms.
Makers had the right to take the adjudicator by the left leg and tell him to mind his own business. But that takes a fair bit of pluck. So Makers implicitly accepted this "designer adjudication" and rushed around to answer and defend the brand new case. That "answer" was enough to extend the adjudicator's jurisdiction. He had been given added authority to adjudicate the new stuff. And Makers lost. It is aggrieved. It ought to have objected to this new stuff. If AIO didn't put up a proper case to Makers before the adjudication was begun the adjudicator simply decides Makers was every bit justified in not paying up.
So, this year's really dangerous idea is "Let's make it law that adjudicators will only adjudicate." The arguing is all over when the adjudication begins.
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 firstname.lastname@example.org.