So, please, let's have a think. Would the courts, when they criticise an arbitrator's behaviour, remember that they're not judges? Next, would arbitrators stop playing at litigation in suits? And would the arbitral institutions make it wholly different to litigation, in order to use the talents of construction people? Don't force these poor devils into half-baked judging.
Phew! Now let's talk about this Pillar and Edwards mess-up. Edwards bought a nice pad in Staverton, Devon. Pillar is a builder. Edwards engaged Pillar to extend his home under a JCT Minor Works contract in the sum of £190k. Changes and delays occurred. Pillar said the final account was £340k, Edwards said £240k.
So the scene was set for arbitration. Horror, oh horror: by the time the process was all done the sides had spent £160k each on their claims consultants' fees. On top of that, the arbitrator's time ran up a bill for £40k. Yes, a whopping £400k in costs was expended arbitrating a £100k loss and expense claim after a minor house extension job.
We expect arbitrators to be of judge quality. Plain silly, that. Technical arbitrators in construction are first and foremost builders
The mess-up then got worse. The arbitrator's award contained awful mistakes; not mistakes of law or fact, but clerical errors. Originally the award gave the builder £75k plus £27k, including interest. But Edwards pointed to the mistakes, which the arbitrator agreed to, and amended the binding award to a mere £11k. Pillar fumed. He, too, spotted a mistake in his favour but the arbitrator said he was too late to apply. The row went to court.
Let me explain. The court has limited powers over arbitrators. The court was asked to refer back to the errors pointed to by the builder. The court did so. However, that's not all. The judge had some very strong words about this affair.
He was clearly appalled by the fact that £400k in fees had been spent to get a result that was flawed anyway. "No dispute of such comparative simplicity ought normally to generate fees and costs, including those of the arbitrator, that exceed the sum in dispute, let alone fees and costs which in total are nearly four times the sum in dispute." Now, just a moment; it is not the two parties' consultants who are on trial here; neither has been given the opportunity in court to explain or defend the sums claimed. Both have good reputations. Nor does it surprise me (although it does horrify me), that all that money was spent. What they did was turn the confounded dispute into quasi-litigation. Each side had two experts plus professionals giving evidence. Each consultant became vexed with their counterparts and copious correspondence was exchanged. Pleadings ran to hundreds of pages on each side. The hearing lasted 10 days.
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.