The box of matters for adjudication that arrives at your door may contain some nasty shocks – such as a cartload of new information. The question is, as ever, is this fair?
What is it about hotel refurbs that means they so often end in dispute? The ultra-posh Dorchester Hotel engaged Vivid Interiors, part of Morgan Sindall, for works and now they are in a spat about the final account. Vivid’s draft final account was issued in March last year and there was the usual toing and froing over the next nine months. Then, come 12 December, Vivid served a notice of adjudication. The “referral” arrived on 19 December. The box contained 37 lever arch files and a 92-page referral notice. A little tag said “Happy Christmas”.
The fact that folk go on holiday at Christmas is just hard luck. So by my calculation Vivid is entitled to the adjudicator’s decision by 20 January 2009. Now comes the real row.
Dorchester’s lawyer, Pinsent Masons, complained that the timetable was so short to deal with these files that it made the exercise an unfair process. They went straight to the High Court. Meanwhile, Vivid gave Dorchester until 28 January 2009 to enter a response and extended the adjudicator’s time. Tish-tosh, said Dorchester, still not enough; still unfair. The judge played a blinder. He said that Dorchester’s objections might be right or wrong. The parties should go away, do their best, then at the end of the affair, if they still felt aggrieved, he could look at the circumstances in retrospect. Fair comment.
The box contained 37 lever arch files and a 92-page referral notice. A little tag said ‘happy christmas’
Now then, let’s see what is happening here. Imagine, if you please, a neat plywood box. There is an absolute right under a construction contract to put a dispute (let’s, for the sake of my metaphor, call it “Jack”) in the box and screw the lid down. The box comes to the adjudicator under the title of “referral”. The Jack in the box springs out and tells the adjudicator what the dispute is all about … the claims, issues, quarrels or contentions that are in dispute. If the box contains all the arguing up to that time about a claim, all’s well. The adjudicator has 28 days to deal with Jack. No court can call any of that unfair. It matters not that there are 37 lever arch files in the box because the two parties have been mulling over the contents of those files in the months gone by. The box is simply bringing all the arguments thus far to the adjudicator. Ah, but almost always, that’s not what happens. Instead, the party coming to the adjudicator sends a different sized box. True, Jack is still in there. But this box also contains new arguments, not put to the other party till now. And when the Dorchester opened its box from Vivid, it was furious. The box contained five files of evidence and expert Dochester had not seen before. “Unfair!” went up the shout.
As soon as the referring party, under the banner of the same dispute, issues new material there is a real probability that the timetable goes to pot. New material begs new answers. Time and again I carry out adjudications that go on for months on end, because that’s only fair. So, putting new stuff in the box changes the size of the dispute and will invariably ruin the 28-day timetable. Mind you, the Dorchester went one step further and said the extended timetable suggested by Vivid was still not enough.
Wait! There is another important turn of events that opens the door to admitting new material from either party. It is to do with how the dispute is identified in the notice of adjudication. As one judge put it more than eight years ago in KNS vs Sindall: “A party to a dispute who identifies the dispute in simple or general terms has to accept that any ground that exists which might justify the action complained of is comprehended within the dispute for which adjudication is sought.” I take that to mean that the respondent is impliedly invited to run any defence, answer or new material they think fit. And the same goes for the referring party. The intention of the Construction Act is that the already rehearsed dispute is what is to be done and dusted in 28 days. But the act’s wording does not constrain the party that brings the adjudication from casting a wide notice and therefore allowing the respondent to do the same. Then the only limit is the time period to be agreed between the parties. As to what time is fair, it is, like Jack in the box, unpredictable.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings Temple