Readers will recall that it was the headless chickens who predicted that this decision would damage adjudication and the ostriches who said this view was alarmist. In fact, the decision will make adjudicating more difficult by putting extra constraints on how adjudicators operate.
Let us remind ourselves of the facts. In the course of an adjudication, Discain's representative, Jeremy Hackett, made some calls to the adjudicator, Roy Sutcliffe. During the course of one of these, substantive matters were discussed. The conversations were disclosed in faxes sent between Sutcliffe and Hackett and copied to Opecprime. Opecprime raised no objection.
It was not until Discain attempted to enforce Sutcliffe's award of about £65 000 that Opecprime challenged it, on the grounds that Sutcliffe had breached natural justice. On the hearing of that application, Judge Bowsher found in Opecprime's favour. The judge did not follow the landmark decision of Mr Justice Dyson in Macob vs Morrison, which rejected an objection on the grounds of natural justice, on the basis that the breach in that case had been purely procedural. He stated that the position must be different where, as in this case, the breach was substantive. In those circumstances, he felt the appropriate course was to refuse to enforce.
After some months, Discain decided to take the case to trial, where Judge Bowsher took the unprecedented step of asking Sutcliffe to give evidence, and he was cross-examined by the barristers for both parties.
Sutcliffe had been pressured to have conversations that he would have preferred not to have had
In rejecting Discain's contention that section 108 of the Construction Act was a self-contained set of principles regarding adjudication laid down by parliament, Judge Bowsher endorsed the view of Judge Humphrey Lloyd in Glencot Development vs Ben Barrett. He said: "The adjudicator has to conduct the proceedings in accordance with the rules of natural justice or as fairly as the limitations imposed by parliament permit." Having heard all the evidence, Judge Bowsher was not satisfied that Sutcliffe's conduct passed that test. Observing that it is more difficult for an adjudicator than for a judge or arbitrator to conduct themselves without criticism, he noted that Sutcliffe accepted that he had been pressured to have conversations that, in retrospect, he would have preferred not to have had.
In his decision, the judge lays down some useful guidance for adjudicators about telephone calls. First, he notes the difference between calls initiated by the adjudicator as part of their inquisitorial role and calls made by one of the parties. Second, he notes the difference between administrative calls and those in which the adjudicator receives "relevant information", which must be passed to the other side.
In the judge's view, Sutcliffe had been encouraged to go beyond what was acceptable in natural justice terms. The circumstances were such that a fair-minded and informed observer would conclude that there was a real possibility or danger that he was biased.
Dominic Helps is a partner in solicitor Shadbolt & Co.