Welcome to the lion's den

Since the passing of the Arbitration Act 1996, arbitrators have had to learn many new skills. Most are not lawyers by training or vocation. Even before that act, they had to instruct themselves on legal issues that came before them. However, the new act requires arbitrators to become involved in areas of law and procedure that before they did not have to venture into.

A recent case has clearly established that arbitrators will have to deal with questions of contribution. Contribution is covered by the Civil Liability (Contribution) Act 1978, which permits the court to apportion responsibility between parties that are liable to a claimant in respect of the same damage or loss.

For instance, a workman on a building site who suffers injuries as a result of the negligence of two or more parties can sue any number of them. If successful, he will recover 100% of his damages from whomever is held liable. However, the court can apportion responsibility for the injuries between those parties. The person who provides negligent scaffolding, although 100% liable to an injured person, may be able to recover, say, 25% from a negligent supervising contractor.

There are, unfortunately, no hard and fast rules about how one fixes apportionment. It must be “just and equitable having regard to the extent of that person’s responsibility for the damage in question”. There is some legal precedent to assist, but not very much. For instance, if the court determines that one party is predominantly or primarily responsible for the damage or injuries, that party will usually pay between two-thirds and three-quarters; a party that is secondarily responsible will called on to pay the balance.

The case of Wealands vs CLC Contractors decided on 22 July 1999, confirms that arbitrators do have the power to fix contributions.¹ Mr Wealands was a shot-blaster killed in an accident involving a scaffold suspended from Hammersmith Bridge. His widow sued the main contractor, which joined as third parties in the proceedings the scaffolding subcontractors and the operators of a barge alleged to have fouled the scaffolding. The case against the scaffolding subcontractor, which was obviously conditional on the defendant being found liable, was based on claims for damages for breach of contract and negligence, and also for contribution.

One can predict a substantial number of challenges to arbitrators’ awards in the future, particularly those involving the new fields of practice and law

The scaffolding subcontractor applied for a stay of the third-party proceedings under the Arbitration Act 1996 because the ICE subcontract in question contained an arbitration clause. The Court of Appeal decided that third-party proceedings had to be stayed, and that the arbitrator had power to award contribution, even though the 1978 act talks in terms of “the Court” fixing contribution.

The effect of the stay is that there will be two tribunals, the court and the arbitrator, to rule, separately, on the causes of the accident and the responsibility therefore. This means more work for lawyers and more cost, but is the inevitable consequence of the 1996 act.

The arbitrator will have to tackle the thorny question of contribution, which may prove doubly difficult because the arbitrator will not have the other parties to the court proceedings before him. He will have to tackle contribution for the damages for which the defendant is found liable (if at all) on the basis of limited legal precedent or authority.

Contribution is just one of the new areas of knowledge and experience into which arbitrators will have to go. One suspects that the learning curve for legally unqualified arbitrators may prove to be too steep for some. One can predict a substantial number of challenges to arbitrators’ awards in the future, particularly those involving the new fields of practice and law with which they will have to deal.