In Carillion vs Devonport, the Court of Appeal was right to back an adjudicator’s decision to award interest, but in doing so it made some unhelpful comments …
The Court of Appeal in Carillion Construction Ltd vs Devonport Royal Dockyard Ltd said: “The purpose of adjudication was and is to determine who shall hold the disputed funds until such time as the dispute is finally resolved.” My Lord, that is wrong. The purpose of inventing 28-day adjudication in 1998 was to provide an efficient way of adjudicating a list of quarrels between A and B. Why? Because litigation was hopelessly inefficient.
The Court of Appeal also said: “The task of the adjudicator is to find an interim solution which meets the needs of the case.” My Lord, it isn’t. The task of the adjudicator is to adjudicate. He decides by asking if A puts a better case than B. If he does anything else, he acts quite improperly.
There is more. The Court of Appeal approved the notion “that the adjudicator is not necessarily expected to arrive at a solution, which is correct”. My Lord, neither judge, nor arbitrator, nor adjudicator is deciding who is correct. They are choosing between A and B’s arguments on each quarrel. The Court of Appeal added: “The task of an adjudicator is not to act as arbitrator or judge.” My Lord, wrong. Arbitrators adjudicate, judges adjudicate and adjudicators adjudicate. They all decide A and B’s quarrels in precisely the same way. The Court of Appeal thinks there is this difference: “The time constraints within which [the adjudicator] is expected to operate are proof of that [difference].” Wrong. Twenty-eight days to adjudicate a list of quarrels is ample. It goes awry when A and B try to develop their case as in litigation, there is not enough time. Do it properly. The 28 days is to adjudicate extant quarrels, not new ones thought of in the 28 days.
The Court of Appeal said: “The need to have the ‘right’ answer has been subordinated to the need to have an answer quickly.” My Lord, wrong. Nothing has been subordinated to time. A and B have been arguing. No adjudicator is yet involved. A loses patience and the adjudicator is given all the arguments and 28 days to understand them. No adjudicator says who is “right”. He says whose arguments are better, that’s all.
The Court of Appeal said: “The Scheme was not enacted in order to provide definitive answers to complex questions. Indeed, it may be open to doubt whether parliament contemplated that disputes involving difficult questions of law would be referred to adjudication under the statutory scheme or whether such disputes are suitable for adjudication under the Scheme.” My Lord, wrong.
Arbitrators adjudicate, judges adjudicate and adjudicators adjudicate. They all decide A and B’s quarrels in precisely the same way
The Court of Appeal also said: “We have every sympathy for an adjudicator faced with the need to reach a decision in a complex case.” Why the sympathy? If the case is beyond the adjudicator because it is too complex, he should resign because he will not be adjudicating and I beg the Court of Appeal to declare it void.
As for Carillion Construction Ltd vs Devonport Royal Dockyard Ltd, Carillion accused Devonport in several quarrels of owing £10.5m. The adjudicator adjudicated and agreed with Carillion’s arguments. Devonport said he had not adjudicated properly, because he refused to consider all of its arguments. If Devonport is right, it is right to refuse to pay. But on the facts, the Court of Appeal agreed with the first judge that the adjudicator had adjudicated this quarrel. He had asked himself: “Are these arguments relevant?”, and was persuaded that they weren’t. Good adjudicating. He had also decided Carillion was entitled to £1.1m interest because he accepted Carillion’s argument that there is a freestanding power given to the adjudicator to award interest at paragraph 20(c) of the Scheme. No there isn’t, said the Court of Appeal. But the decision of the adjudicator stands because he adjudicated the quarrel without anybody objecting to his jurisdiction.
To “adjudicate” is the same task no matter what tribunal. The big difference with high-speed adjudication is that the adjudicator only adjudicates. The arbitrator or judge comes on board sooner to case manage and harvest the quarrels. True, it is not unusual for A and B in adjudication to also want to argue new points. But in the end, the tribunal simply adjudicates the list of quarrels. Adjudication is completely different from litigation and completely the same. Try it, m’lud.
Tony Bingham is a barrister and arbitrator. Email him on firstname.lastname@example.org