What on earth have these highfalutin ideas got to do with disputes about digging holes in Blackburn or installing the H&V in the dome? Well, Mr Adjudicator or Mr Arbitrator, if your name is put in the contract as the deciding referee in a dispute, you are likely to be thrown out or your decisions set aside because of all this human rights stuff. And you are going to hear more and more about this law. The government is committed to a programme of constitutional reform and is determined to "enhance the awareness of human rights in our society".
Fifty years ago, the UK put its signature to the European Convention on Human Rights. It contains fundamental rights and freedoms for you. For example, you have a right to a private and family life, a right to free expression, a right to a fair trial. Before, you had to dash off to Strasbourg and apply international law to get somewhere with the convention. But parliament has now brought these rights home. Already in Scotland and, from 1 October this year, in England and Wales, the convention’s rights will be enforceable by our domestic courts.
Now, let me tell you the story of how a Scottish court recently explored human rights, and what this may tell us about the rights and wrongs of one party choosing who is to be the adjudicator/ arbitrator on a construction contract. I think we can use the Scottish decision to make the naming of a person safe and free from criticism or doubt.
Hugh Starrs and James Chalmers were the defendants in a minor trial before a "temporary” sheriff in Linlithgow court. They claimed the court was in breach of article 6 of the European Convention, which says: “Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.” In a nutshell, there was a risk that the temporary sheriff was interested in becoming a permanent sheriff and might make decisions influenced by the desire to avoid harming his career prospects.
The question was whether the method of appointment of the tribunal provided protection against improper interference or influence. The three Scottish judges were clear; the appointment system bumped into the convention’s requirement of independence and impartiality. They set aside the temporary sheriff's decisions.
The arbitrator or adjudicator must be seen to be completely uninfluenced by future opportunities, nudge-nudge, wink-wink
So, Mr Arbitrator or Mr Adjudicator, personally you might be the most even-handed person in the world, but if your appointment gives the impression that you have an eye to further appointments in some later contracts from the same employer, you breach article 6.
The Construction Act calls only for adjudicators to be impartial. But the convention requires impartial and independent people. In any case, the decision of the Scottish court makes clear that lack of impartiality and lack of independence are interlinked. These are some of the phrases used by the judges: “There has to be guarantees against outside pressures”; “no personal prejudice or bias”; “the tribunal had to be perceived as impartial and independent”; “independence is the necessary pre-condition to impartiality”.
So, how can an employer make the appointment stick? Do not rely on the idea that the other party appears to have agreed on a name. A subsequent quarrel based on article 6 may still succeed. Instead, here are two ideas. The first is best: inform the named arbitrator or adjudicator that he or she is appointed for this one project only and will never be appointed again. Alternatively, inform the appointee that he or she is, or will be, appointed for all jobs until reaching retirement age. In other words, they have security of tenure. I doubt anyone would go that far — but do you see the point?
Arbitrators/adjudicators cannot be seen to have half an eye to being the chosen person in future works. They must be seen to be completely uninfluenced by future opportunities, nudge- nudge, wink-wink. Overall, it may be best not to put forward an arbitrator or adjudicator’s name at all. Instead, agree someone once the dispute has arisen or have an appointing body fish into its lucky dip of candidates.
Postscript
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EU, or e-mail him at info@tonybingham.co.uk.
