Perhaps Hydra-Tight thought that idea was not up to snuff either. It called in the ICE to appoint. Tony Elven, engineer, was appointed. Mowlem protested. Mowlem told Elven two things: that he should go away, and if he didn’t and it was eventually shown that he had no right to adjudicate, it would sue him for its costs. I bet he thought that this idea wasn’t up to snuff.
Now then, let me remind you about this jurisdiction business. There can be all sorts of reasons why the adjudicator has no right to be the referee on a particular contract, but the snag is that the adjudicator is not empowered to decide that “satellite” quarrel. It is reasonable for him to quit, if it is obvious and plain that he has no right to adjudicate. Mostly, though, the position is arguable, so he stays. Then, usually the parties press on with the substantive quarrel. The annoyed party that quarrelled with jurisdiction can await the outcome, and if ordered to do something can resist enforcement by telling the court that the decision of the referee is void since he had no right to be on the pitch.
In this case, Mowlem decided to be a bit less restrained. It went to court to stop Hydra-Tight. Meanwhile, Elven continued to be the referee. The case got to court just before Elven’s decision, and it decided that Elven was wrongly appointed; it should have been a barrister. The judge then issued an injunction to stop the adjudication.
But, what about Mowlem’s costs? Oh, it wanted all that cash either from Hydra-Tight or the adjudicator. This could easily be thousands of pounds. It so happens that the matter did not see the adjudicator in court because Mowlem and Hydra-Tight settled the whole affair privately.
If you think the referee has no right to be there, then jolly well sit back, relax, don’t participate – you can’t lose
The idea of suing the adjudicator, however, is a matter of some importance and I had a chat with the solicitor who was suing. First, what was the legal basis of the claim against the adjudicator? He could not sue in contract because Mowlem refused to agree that there was any right to adjudicate. So, he said he would sue in the tort of negligence; in other words, for a negligent misstatement. I have to admit that I struggle with that starting point: to get the complaint off the ground, there has to be a duty owed by Elven to take care of Mowlem. But as Mowlem has told him to push off, how can he owe a duty of care? And if a duty does arise, there has to be a loss to Mowlem, but the only loss to Mowlem is when it spends money playing adjudicators.
Why didn’t Mowlem just push off and stop playing? The reason is that adjudications have a commercial importance – so that the party who is certain that there is no adjudication still plays. That’s not convincing. The real answer is that if you think that this particular adjudication is a waste of time because the referee has no right to be there, then jolly well sit back, relax, don’t participate – you can’t lose. My word, that would take a huge amount of courage. Imagine how much egg would get stuck on your face if it were to turn out that the adjudicator did have jurisdiction. You would have refused to have taken part, but been wholly wrong to do so.
The reality is that jurisdiction quarrels are often quite sound. The answer is to arbitrate – yes arbitrate – the jurisdiction point. There are 10 people on a special panel at the RICS, each of whom is pledged to act within hours to decide jurisdiction points. In the case of Mowlem and Hydra-Tight, they could have come to a decision on the same day as jurisdiction became a quarrel. They needn’t have bothered the adjudicator at all. The reason is that these senior arbitrators always “trump” any adjudicator because an arbitrator has similar powers to the High Court judge.
Tony Bingham is a barrister and arbitrator specialising in construction.