Responding parties often argue that they have been the victim of an ambush by the referring party, but what is an ambush and why does it matter?
Ambush: the early days
When the Construction Act 1996 first introduced adjudication to the construction industry, much was written about the possibility of the referring party “ambushing” the responding party. The referring party could spend a great deal of time preparing and refining its case before launching the adjudication process, leaving the responding party with little time to deal with the referral within the statutory framework.
A number of successful challenges to adjudicators’ decisions were based on complaints of ambush. For example, in London and Amsterdam Properties Ltd v Waterman Partnership Ltd substantial quantum evidence was served by the referring party for the first time towards the end of the adjudication proceedings. HHJ Wilcox QC found that the adjudicator ought to have excluded the new evidence and, in failing to do so, he failed to comply with the requirements of natural justice.
TCC takes a more pragmatic approach
Two recent Technology and Construction Court (TCC) decisions illustrate the court’s current pragmatic approach.
In Bovis Lend Lease Ltd v The Trustees of the London Clinic Ltd [2009] EWHC 64 (TCC), Akenhead J summarised the principles to be applied when considering allegations of ambush:
- The referring party’s “ambush” does not in itself amount to procedural unfairness.
- If there is an ambush, the adjudicator can decline to accept the appointment on the grounds that justice cannot be done, or can indicate that he is unable to produce his decision within the time allowed.
- The adjudicator’s decision will not be procedurally unfair simply because the dispute is complex or involves large volumes of material.
In The Dorchester Hotel Ltd v Vivid Interiors Ltd [2009] EWHC 70, a “kitchen sink” final account claim was referred to adjudication at 4pm on 19 December 2008. The referral included 37 lever arch files of documents together with new evidence (witness statements and expert reports). The responding party issued a Part 8 claim for a declaration mid-adjudication: it alleged the timetable would lead to a breach of natural justice because it had insufficient time to have a fair opportunity to respond.
Coulson J refused to grant the declaration because he was not able to say whether there would be a breach of natural justice. The most important factor was that the adjudicator considered he had sufficient time to fairly determine the dispute within the extended timetable.
How can the referring party avoid a decision being successfully challenged on natural justice grounds?
The referring party should:
- Put its arguments to the other side before referring the dispute to adjudication. This may avoid arguments that the responding party has not had sufficient time to deal with them.
- Not refer disputes immediately before the Christmas or summer vacations. It gives the adjudicator the wrong impression about the merits of the case and puts pressure on the referring party to extend the timetable.
- Include only the material that is necessary to prove its case. The more material that is included, the longer the responding party and the adjudicator may reasonably need.
- Agree to an extension of time request (within reason). It may avoid a court concluding that the responding party did not have sufficient time to deal with the claim.
- Consider whether it would be appropriate to offer more time to the responding party and/or the adjudicator, before they ask for more time.
What about the responding party faced with a claim by ambush?
The responding party should:
- Ask for more time, if it is needed, and explain why it will be prejudiced if it does not get it.
- Reserve its position to challenge the adjudicator’s decision.
- Remember it can raise any defence to the claim, regardless of whether that defence was rehearsed in pre-referral correspondence.
How should the adjudicator respond?
The adjudicator should:
- Ensure the responding party has sufficient time to respond.
- Ensure the decision can be reached fairly in the time available. If not, he should tell the parties and request more time.
