Here’s a puzzle for you: if A and B hire X to decide a dispute, and A and X have a previous relationship, can B tell A to get lost if X decides in favour of A? (Answer below)
The Birmingham Technology and Construction Court has just judged a case that involved the allegation that an individual could not be an adjudicator between two parties if they had already been a mediator in another matter involving one of them. This is a pretty significant allegation for all mediators, adjudicators and nominating bodies, let alone those who name either in their contract documents. The claim was rejected, but it is worth reviewing the slightly odd facts which led to it and the assertions of bias and impartiality.
In October 2005, Mr X adjudicated a case in which party A was involved. Some months later in June 2006, party B engaged party A under an RIBA standard form for architectural services to handle a fit-out. A dispute arose between A and B over A’s entitlement to get paid. On 23 May 2008, A served a notice of adjudication, and A wrote to the RIBA to ask it to nominate an adjudicator.
Four days later, X acted as mediator, again following a RIBA appointment, in a separate dispute to which A was a party. On 29 May, the RIBA appointed X as the adjudicator for the dispute between A and B.
A quick summary, then. In 2005, X had been the adjudicator in a dispute involving party A. In 2008, he was a mediator in a dispute again involving party A. Finally, he was nominated as adjudicator for the dispute with party B.
For the 2008 adjudication, a site inspection was carried out at which A, B and X were present. Upon arrival, A and B greeted X, who informed B that he had met A before as a dispute resolver in a previous mediation.
Three days later, the parties exchanged quantity surveyor’s calculations and A’s solicitor sent the information to X.
X replied to this email, commenting on the information, copying in party A and its solicitor, but failing to include B’s representative. A’s solicitor noted this, and less than two hours later forwarded the email to B’s solicitor.
The judge found in favour of party A, which will prompt a deep sigh of relief from all those who are qualified in mediation and adjudication
B’s solicitor demanded an explanation of why this had happened and why A’s email address was in X’s address book, and asked for details of X’s previous involvement with A. X said the email has been mistakenly sent by his secretary to A and not to B’s representative because his computer system had added A’s email address automatically when A had sent emails to him regarding a previous dispute.
On 26 August 2008, X decided that B was to pay A the sums claimed, which were in the region of £140,000, plus costs and interest.
On 8 October, B was yet to comply with the award and A had sought enforcement of the decision by way of a summary judgment. B put forward four submissions opposing enforcement. He said there was:
- A previous dispute resolution relationship between A and X
- Very little time between the 27 May mediation and the present adjudication
- No opportunity for B to object to X’s appointment to the RIBA
- Piecemeal disclosure with regards to X’s prior involvement with A, which meant the details of it were difficult to ascertain.
Based on the cumulative effect of the above, B claimed that there had been a breach of natural justice, owing to bias by the adjudicator. To support its allegation, B relied on cases such as Amec vs Whitefriars, in which it was held that the principles of natural justice applied to adjudicators, and Porter vs McGill, in which the judge concluded that the question was “whether a fair minded and informed observer, having considered all the circumstances which have a bearing on the suggestion that the decision-maker was biased, would conclude that there was real possibility that he was”.
A, in reply to B’s submissions, stated that if the proper test were applied, B’s complaints were not valid. There was nothing to suggest that previous contact between X and A was anything other than professional. Furthermore, previous contact had only occurred twice in three years. X was a highly qualified professional, appointed by the RIBA not by A. The RIBA had asked him if there was any reason he could not take the appointment, which indicated that he had consciously addressed his prior involvement and had concluded that there was no reason he could not be appointed.
The judge found in favour of A, which will prompt a deep sigh of relief from all those who are qualified both in mediation and adjudication. The ramifications of a decision that you cannot act as dispute resolver if you have done so before for one of the parties would be substantial and lead to all sorts of enquiries prior to appointments – perhaps even the need for a dispute resolver to decide to practise one method or the other.
James Bessey is head of construction at Cobbetts