REUTERS | Brian Snyder

Adjudicators, their office managers, and natural justice: a cautionary tale

The facts of Paice v MJ Harding are bizarre, and potentially troubling for those involved in adjudications.

In March 2013, Mr Paice and Ms Springall engaged MJ Harding to construct and fit out two residential houses in Surrey. By September 2013, the works had come to a halt and the parties had fallen out. Two adjudications followed in November 2013. Mr Sliwinski was the adjudicator in each and, on both occasions, his decision was in favour of the contractor. So far, so very normal.

In August 2014, the contractor sent its final account to Mr Paice and Ms Springall. This prompted them to make a number of calls to Mr Sliwinski’s office. They spoke to his office manager, Ms Reynolds. One of the calls was quite lengthy. No record was made of the calls, and recollections of what was discussed differed. In September 2014, the contractor commenced a third adjudication. A different adjudicator was appointed, who also found in the contractor’s favour.

The fourth adjudication

In October 2014, Mr Paice and Ms Springall commenced the fourth adjudication. Again the RICS appointed Mr Sliwinski as the adjudicator. Within days, the contractor’s consultant wrote to the adjudicator and the other side, asking for details of any oral communications between Mr Sliwinski and Mr Paice or Ms Springhall, and copies of landline telephone records for a five-day period in August 2014 (when – by sheer coincidence? – the calls to Mr Sliwinski’s office had taken place).

The records were not provided. Mr Sliwinski denied that he had had any contact with Mr Paice or Ms Springall “save in relation to the previous adjudications”. In December 2014, Mr Sliwinski issued his decision in favour of Mr Paice and Ms Springall. He concluded that the contractor should pay them £325,484, and his fees.

The contractor refused to pay. In the enforcement proceedings that followed, Coulson J declined to enforce the decision. He held that a fair-minded observer would consider there was a real possibility that Mr Sliwinski was biased.

The judge held that the long telephone call:

“should not have been permitted to take place at all, particularly given that Mr Sliwinski had already acted as adjudicator in two separate adjudications.”

A step too far?

Is this conclusion a step too far? I think it might be. Is it really credible to say that a call between a person and the adjudicator’s office manager, two months before the adjudication even starts, could give rise to a possibility of bias?

The test is what a fair-minded and informed observer would believe, not the suspicions of a cynical conspiracy-theorist. Of course, adjudicators should be scrupulous and impartial. But they are not TCC judges. Holding them to the exalted ethical standards of a High Court judge feels a little uncomfortable given the rough and ready nature of the adjudication process.

Ultimately, the finding of apparent bias is probably correct. The kernel of the judge’s reasoning is that Mr Sliwinski should have been more forthcoming about the conversation when asked about it. But an implicit suggestion that the very fact of the conversation could amount to a finding of apparent bias seems to me to set a worrying precedent.

No waiver

A final cause of concern was the dismissal of the waiver argument. Mr Paice and Ms Springall argued that the contractor had waived the right to rely on apparent bias. It was plainly no coincidence that the contractor sought landline phone records for precisely the period when the phone calls took place. How it knew about the calls is a mystery, but it is highly likely that it did. Parties to adjudications don’t routinely ask for landline phone records. Once Mr Sliwinski denied any contact between him and the referring parties, the contractor knew it would have grounds for resisting enforcement.

The judge dismissed the waiver argument. He held that since the contractor did not know the content of the conversations, it did not know that the grounds for a natural justice challenge had arisen. It is not easy to reconcile this conclusion with the earlier part of his judgment, where he held that there was apparent bias on the basis of Mr Sliwinski’s denial that he had had any contact with the referring parties.

If you happen to know that previous communications between one side and the adjudicator (or his office manager) have occurred, is it acceptable to sit on your hands and wait for the outcome of the adjudication, and then raise a natural justice challenge if you lose?

It is not clear why carrying on with the adjudication in those circumstances is anything other than a waiver of the right to raise the point. Although this seems unsatisfactory, the number of occasions when a party knows (or suspects) at the outset that a secret conversation has taken place previously will be few and far between. This was one bizarre example.

Crown Office Chambers Richard Sage

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