One theme that flows through many challenges is the question of natural justice. Tony Bingham's article of 23 January 2004 referred to Costain vs Strathclyde Builders, an adjudication enforcement before the Scottish court. In that case, the adjudicator sought legal advice just before making his decision.
Strathclyde subsequently complained of a breach of natural justice when it was not given the opportunity to comment on that advice. The court held that if there was an opportunity for injustice to be done then the adjudicator's decision should not be enforced.
That statement by the court could leave one feeling that something is missing. Perhaps a touch of common sense is what is needed.
One place those involved in the cut and thrust of construction disputes rarely tread is the case law devoted to employment disputes.
However, on this occasion there is something to be gained from a recent decision of the Court of Appeal in Stanley Cole (Wainfleet) Limited vs Sheridan.
In this case, the Court of Appeal was asked to consider whether the decision of a tribunal must be overturned if it did not disclose to the parties all of the information it used to reach a decision.
In dealing with this point, the Court of Appeal made a number of useful comments.
First it found that if the conclusion drawn from the information "was so clear that a party could not make any useful comment in explanation, then it matters not that [it] was not mentioned".
The Court of Appeal went on: "Thus it seems to me, [the missing information] must alter or affect the way the issues have been addressed to a significant extent so that it can truly be said by a fair-minded observer that the case was decided in a way which could not have been anticipated by a party fixed with such knowledge of the law and procedure as it would be reasonable to attribute to him in all the circumstances."
The Court of Appeal also noted that "failure to give a party the chance to address [the missing information] may, not must, amount to a breach of natural justice. The hearing will not have been unfair if it has caused no substantial prejudice to the party claiming to be aggrieved."
The Court of Appeal went on: "The vital question, in my judgment, is whether it would have made any difference to the outcome if [the aggrieved party] had been armed with this authority. That is a question for this court to answer. It is not a matter we must refer back to the original tribunal."
This all seems quite interesting but what does it mean?
In essence the Court of Appeal is saying here that a procedural error will not automatically give rise to a breach of natural justice. One must consider whether there has been a substantial injustice caused or, if the procedural error had not occurred, would it have made a difference. If it would have made no difference, then an appeal ought not to be allowed. The question of whether it would make a difference was for the Court of Appeal to decide.
Therefore, a procedural error, such as failing to allow the parties to comment on advice received, would not prevent the court from enforcing an adjudicator's decision. The court ought to ask itself, when faced with the enforcement, did the error or omission actually change the outcome? If the answer is no then, following the Court of Appeal's judgment, the adjudicator's decision ought to be enforced.
This seems to be at odds with the way the courts are currently dealing with this issue. In Costain vs Strathclyde Builders, had this argument been adopted, the court might well have enforced the adjudicator's decision.
There is a difficult balancing act here. On the one hand the court needs to protect the integrity of the adjudication system. On the other hand it must consider the proportionality of refusing to enforce an adjudicator's decision on purely technical grounds.
However, the approach adopted by the Court of Appeal seems to sit happily in the balance, with the court retaining the right to refuse enforcement based on the reality of the situation at hand.
Rob Horne is an associate at Addleshaw Goddard. His email address is firstname.lastname@example.org