The scheme says, for example, that the adjudicator may take the initiative to ascertain the relevant facts and law to determine the dispute, and the adjudicator shall reach a decision within 28 days of the referral notice. But what happens if these demands are not complied with? Words such as "shall" and "must" have traditionally been associated with mandatory procedural requirements. They must be complied with absolutely, or else any subsequent decision or result will be void or made without jurisdiction.
The word "may" has suggested a directory requirement. But non-compliance with one of these is unlikely to invalidate a decision as it is when a mandatory requirement is not met.
But now all this has been changed, following Lord Woolf's decision in a recent immigration case – Home Secretary vs Ravichandran.
Briefly, the facts were these. The Court of Appeal had to consider two asylum appeals.
A special adjudicator had decided to grant asylum to two people from Sri Lanka. An immigration appeal tribunal had allowed appeals from the home secretary against the decision of the special adjudicator. The issue in both cases concerned the consequences of the home secretary failing to use the prescribed form for applying for leave to appeal from the special adjudicator to the tribunal. The asylum seekers argued that the failure to use the prescribed form meant that the tribunal's decision was a nullity.
Lord Woolf said: "The issue is of general importance and has implications for the failure to observe procedural requirements outside the field of immigration." He went on to say it was not helpful to categorise procedural requirements as directory or mandatory. Such requirements are generally designed to further the interests of justice and, therefore, it was much more important to look at the consequence of non-compliance. In this case, the asylum seekers had fully exercised their rights of appeal to the tribunal and had not been prejudiced by the home secretary's procedural lapse.
The proper approach, explained Lord Woolf, was to regard the question of whether a requirement was directory or mandatory as only a first step in the inquiry. In most cases, there are other questions to be asked:
- Has there been substantial compliance with the procedural requirements even though there has not been strict compliance?
- Is the non-compliance capable of being waived (for example because there is a discretion to grant an extension of time to enable compliance)?
- The traditional interpretation of procedural non-compliance was overturned by the Court of Appeal
- This may disallow certain types of objection to adjudicator’s decisions
- If the non-compliance is not capable of being waived or has not been waived, what is the consequence of the non-compliance? This is sensible stuff. Hopefully, it will pre-empt silly arguments where compliance with procedural requirements is less than strict.
So, how does this influence the Scheme for Construction Contracts? Take, for example, paragraph 1(3) of the scheme's adjudication provisions. This states that the adjudication notice shall briefly set out:
- the nature and brief description of the dispute and the parties
- where and when the dispute arose
- the nature of the redress sought
- the names and addresses of the parties.
What happens if this requirement is not fully complied with? Following Woolf, that depends on the consequences of non-compliance. So, it now has to be asked whether the referring party's omission would have unduly prejudiced the other party's ability to present its side to the adjudicator.
What if the referral to the adjudicator takes longer to deliver than the seven days dictated by paragraph 7 of the scheme? There is no possibility of this requirement being waived (either by the other party or the adjudicator).
So, can the other party object if the adjudicator decides to proceed following a late referral notice? The adjudicator might be able to proceed if the delay has been negligible but not, presumably, if it has been excessive. In the latter case, the referring party may have to start the process again by submitting another notice of adjudication.
Rudi Klein is a barrister and chief executive of the Specialist Engineering Contractors Group.