Here are two articles dealing with natural justice and adjudication. In this one, the claim is that the adjudicator read too much into the evidence …
Have you had a go at that fairground game where you bash a peg to send the ball to bong the gong at the top of the pole? I reckon contractor Igoe wanted to do something similar to its adjudicator. If you are an adjudicator and you want to top the unpopularity stakes, do what Igoe accused this adjudicator of doing. It said he had made findings of fact or reached conclusions based on his own expert assessment of a laboratory analysis when such findings and conclusions had not been contended for by either party and nobody had the opportunity to comment on those findings or conclusions.
Now let me tell you how the adjudicator got into this position. Perco was Igoe's subby. Perco and Igoe fell out. Perco does auger boring. The auger boring on Igoe's job was a tad trickier than Perco allowed for. Eventually, Igoe asked Perco to go; Perco went. Now came the adjudication: each claimed the other owed it money.
The adjudicator found that Igoe was not entitled to make any contra-charge, then reduced Perco's claim because he considered that the man-hours claimed by Perco should be reduced "based upon my experience of site working practices". Wait a minute said Igoe, we had no inkling that we needed to address these points.
Meanwhile, Igoe was ordered hand over the money and half the adjudicator's fees. Igoe refused to do either. It said the decision was reached "in breach of natural justice". So Perco sued Igoe for its money and the adjudicator sued Igoe for his money. The trial of both came on together and the adjudicator ended up in the witness box telling the judge how he had reached his decision.
Wait, wait. Before we go on, take a tip. If you are a party in an adjudication and bewildered by what is said in the award, ask the adjudicator for better information. Some adjudicators think they should say no more. Rubbish. If the customer cannot fathom how you reached the result, tell them. Charge them, but tell them. It is unfair to leave the customer aggrieved if all it wanted was a better explanation.
You cannot change the result but a better explanation might save your reputation and prevent a complaint. Maybe it would have prevented what happened in the Igoe case.
The judge was satisfied that the adjudicator was not a buffoon. The trial looks like an expensive inquiry into how he adjudicated. And Igoe paid
The trial looks to me like a full and expensive inquiry into how the adjudicator adjudicated. Igoe paid for it, but didn't get much for its money: once the adjudicator explained to the judge how he had reached his decision, the judge was satisfied that the fellow was not a buffoon.
To make his decision, the judge harked back to a case I told you about on 2 December, Carillion vs Devonport Royal Dockyard (page 54). That included an accusation of a breach of natural justice, this time on the grounds that the adjudicator ignored arguments put up. The test is to ask if, on the facts, there has been plain and obvious unfairness. The court's radar is set quite high here.
The adjudicator in M Igoe Limited vs Perco Engineering Services Limited did something that is easily misunderstood by the parties. He looked at the information in the materials put to him then explained them to himself and drew conclusions from them on his own. These were not the conclusions argued for. He "elucidated" what was implicit. He did not commit the sin of finding facts independently of the evidence before him. He only worked with what he had. But he did reach an opinion not argued for from the materials. That apparently gets under the radar. But I do wish he had put his opinion up for comment anyway, or even said nothing.
The judge did not have to decide if an adjudicator forfeits his fees if his award is seriously unfair. But he said: "It is, I must say, a surprising submission that if an adjudicator's decision has been reached in serious breach of the rules of natural justice … the adjudicator should nevertheless be entitled to claim payment for producing what was in fact a worthless decision without even temporary binding legal effect." But all that is to be argued on another day.
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 email@example.com.