My view is that it does not, and nor should it.
Put simply, the principles of natural justice require that no person be judged in their own cause, and that each party has a right to be heard and to challenge any statement or document prejudicial to its case.
The statutory framework for adjudication in section 108 of the Construction Act itself breaches these principles, as it requires the adjudicator to act impartially rather than be independent. This means that an early form of adjudication piloted by the Property Services Agency, where it was contemplated that the adjudicator would be a public sector employee (albeit an individual unconnected with the dispute), would be permissible.
More importantly, the act requires that the adjudicator has the power to take the initiative in ascertaining the facts of the law – in other words, to act inquisitorially. This may well preclude the parties making representations, and, given the constraints of a 28-day period, will often mean that one party will not have the chance to challenge prejudicial statements and documents.
Against this background, it is difficult to see how the rules of natural justice could apply to adjudication under the act. I am in good company in this view: the Honorable Mr Justice Dyson – the senior judge in the Technology and Construction Court – said in Macob vs Morrison that he had formed “the strong provisional view that the challenge [to an adjudicator’s award on the basis of an alleged breach of natural justice] is hopeless”.
Of course, a higher court may eventually take a different view, but, if it does, the efficacy of adjudication would be undermined. Natural justice is entirely appropriate to an adversarial process such as arbitration, and is also crucial where a final decision is being reached on a particular issue. But because of the inquisitorial nature of adjudication and its short time limits, ruling out documents or evidence because a party has not had an opportunity to respond to them could emasculate the process. If an adjudicator were to uncover a vital piece of evidence on day 27 of a 28-day adjudication, it would be most unfair if he was unable to consider it.
We should also remember that, although the enforceability of adjudication has been clearly established, it remains a temporary solution in the sense that it can be challenged in arbitration or the courts without the need to establish errors of fact, law or procedure.
If a court should ever reach the view that natural justice applies to adjudication, I think parliament would have to move swiftly to amend the act.
Postscript
Jennie Price is director of the Major Contractors Group
