Dealing first with Hall's view of Macob 1 and Outwing 2, we should remember that these cases were concerned with procedural issues and not with the essential “fairness” or otherwise of the adjudicator’s decision. It is important to remember that a party that is dissatisfied with an adjudicator’s decision does not “appeal” that decision to an arbitrator or to the court. It is the dispute itself that is raised afresh before the judge or the arbitrator, not the adjudicator’s decision.
What exactly do adjudicators do? In short, they make decisions. That might seem self-evident, but it is important. Adjudicators cannot be expected to make decisions in the same way that judges and arbitrators do because they will not have had the time to carry out the same detailed investigation into the issues. As Mr Justice Dyson recognised in Macob, adjudication is a “mechanism for settling disputes in construction contracts on a provisional interim basis”. The idea is to make a decision that lets the project proceed and not to allow contracts to become mired in disputes that distract the parties from the prime business of getting the job completed on time and (hopefully) to cost.
Hall suggests that, probably as a result of the Arbitration Act 1996, fewer cases are going to court. Instead, they are being sent to arbitration. As a result, there is less precedent to rely on because arbitration (and adjudication) are private processes where decisions are unreported. In the absence of reported decisions, a level of certainty disappears from the legal system that would prevent litigants and judges knowing how cases on similar facts have been decided in the past.
This may be a little too straightforward. A number of pressures are exerted on those seeking to resolve a dispute, some of which push towards litigation and others towards arbitration. I do not think the presence or otherwise of the right to adjudicate greatly affects this particular issue.
Hall is right to point out that section 9 of the Arbitration Act 1996 does not allow the court any discretion, when faced with a valid and operable arbitration clause in a building contract that covers the dispute in question, to refuse an application to refer those proceedings to arbitration. This, in itself, does not account for a swing away from the use of the courts.
First, section 9 of the Arbitration Act mirrors section 1 of the 1975 Arbitration Act, which dealt with international construction contracts (“non domestic” contracts in the parlance of the act), and section 1 did not allow the use of any discretion either.
Second, the courts have emphasised in the Channel Tunnel 3 and Halki vs Sopex 4 decisions, that parties to contracts should observe the contractual dispute resolution provisions, whether they be arbitration, adjudication or otherwise.
On the other hand, the removal of the fetter placed on the courts by the Crouch 5 decision as a result of the decision in Beaufort Developments 6, together with the introduction of the option to litigate in the JCT98 standard form, may have freed parties to choose the courts instead.
Perhaps the most significant influence at present is the impact of the civil litigation reforms introduced by Lord Woolf, which have given parties intending to litigate time to stop and consider whether they wish to control the process to a degree allowed now only by the Arbitration Act 1996.
I suspect that the way in which adjudication really affects this process is that it will reduce the number of full-blown arbitrations or court hearings. It seems likely that many more disputes will be resolved early on by adjudication or, possibly, even by the very fact that the option is available to the parties at all, encouraging them to negotiate a settlement rather than going to adjudication.
Whether adjudication is ultimately perceived to be just or unjust will depend on the quality of the adjudicators, in much the same way that arbitration works now (and also the litigation procedure). There are excellent adjudicators and some less-than-competent adjudicators in the same way that there are excellent and less-than-competent arbitrators and judges.
Whether adjudication is ultimately perceived to be just or unjust will depend on the quality of the adjudicators, in much the same way that arbitration works now
Finally, Hall proposes the “nightmare scenario” of an adjudication right at the end of the limitation period in which the client launches an ambush on the main contractor, having spent a great deal of time preparing its case and then, presumably, refusing to grant any extension of time to the adjudicator.
The ambush scenario is, of course, one that has long been anticipated by adjudicators. In such circumstances, the adjudicator would need to be robust in considering how best to proceed. If one party is faced with a claim launched by the other party that has clearly taken many months to prepare, there is nothing to stop the adjudicator from requiring the referring party to submit within, for example, two working days, a summary of its case contained on two or three sides of paper and to indicate that the adjudicator will regard that as the primary source of information for the referring party’s claim.
Further, the other party can be at liberty to respond either to the synopsis paper or to the main claim itself. Is this fair or just? Maybe, maybe not. It does, however, address the issue and allow the matter to proceed.
To summarise, I am a little more optimistic than Hall about adjudication. Adjudication is not an end in itself, but a means to an end: it is there to enable a contract to continue while decisions are made on disputes between the parties. It is, by its nature, interim and provisional, and while any system is open to abuse, I like to think that in the vast majority of cases, it will work.
1 Macob Civil Engineering vs Morrison Construction Limited  BLR 93
2 Outwing Construction Limited vs H Randell & Son  BLR 156
3 Channel Tunnel Group and France Manche SA
vs Balfour Beatty Construction  1 QB 656
4 Halki Shipping Corporation vs Sopex Oils Limited (1998) 1 WLR 726
5 Northern Regional Health Authority vs Crouch (Derek) Construction Co Limited  QB 644
Simon Lewis is a partner in solicitor Dickinson Dees in Newcastle upon Tyne.