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Arbitrators, adjudicators and judges’ reasons

A couple of years ago I wrote about reasons in an adjudicator’s decision (it wasn’t the first time or the last time the topic has come up). At the time I referred to Ian Dury’s song, Reasons to be Cheerful (part 3). That song came to mind again recently, this time in the context of the judgment in Compton Beauchamp Estates Ltd v Spence.

Compton Beauchamp Estates Ltd v Spence

This was an arbitration case that ended up before Morgan J in the Chancery division, with the claimant challenging the arbitrator’s award under section 68 of the Arbitration Act 1996 (“serious irregularity” that causes “substantial injustice”). Several grounds were advanced, including that:

  • The arbitrator failed to deal with the issues that were put to him.
  • There was uncertainty and ambiguity as to the award’s effect.
  • The award did not comply with the formal requirements of an award, in particular because the reasons were inadequate.

While I don’t need to set out all the facts, it is worth mentioning that the claimant was the freeholder and landlord of a farm in Berkshire, the defendant was the tenant of the farm. The arbitrator had been asked to determine the amount of rent payable in relation to the farm under the Agricultural Holdings Act 1986. He concluded that £34,800 per annum was due (it had been £25,500 per annum).

After the award was delivered, both parties asked the arbitrator to give further reasons for the award, relying on section 57(3) of the Arbitration Act 1996 (which allows the award to be corrected or clarified). Before those reasons were provided, the claimant started court proceedings, mainly to avoid being out of time to challenge the award under section 69. (This application subsequently failed, but the details of that aren’t relevant to this post.) The arbitrator subsequently provided the reasoning the parties had sought.

“…in no sense a model for an award”

Morgan J identified that the key to the application was the adequacy of the arbitrator’s reasons. He looked at a large number of cases and concluded that an arbitrator should:

“…explain why he has decided the essential issues in the way in which he has.”

He went on to state that it was not obvious why the arbitrator had not been prepared to be more helpful, especially when the parties requested further reasons. He noted the arbitrator would have been appointed because of his expertise in rental valuations and would have been required to assess the expert evidence before him. To reach his conclusions, he had to think through what the experts said. As such, he should have been able to explain his reasoning more fully on the important points in the dispute.

On specific aspects of the arbitrator’s award, the court said things like:

  • “the arbitrator did not say why he reached that conclusion”
  • “the arbitrator had just done enough to give reasons”
  • “the arbitrator’s reasoning… was just enough to cross the borderline as to adequacy of reasoning”

After all this, it was with some surprise that I got to the end of the judgment and found Morgan J had stood back, looked at the position overall and concluded that, while the reasoning was poor, it was “just about enough to explain the conclusions reached”. He reached the other grounds too.

Parallels with adjudication?

The judgment made me wonder about the parallels with adjudication. After all, in adjudication, an adjudicator is not required to provide reasons, unless requested by the parties to provide them. In arbitration, there is a statutory requirement (section 52(4)). However, in practice, it is rare for the adjudicator not to be asked to provide reasons.

Equally, the adequacy of an adjudicator’s reasons has been the subject of judicial scrutiny, with several cases confirming that brief reasons will suffice, provided they show that the adjudicator has dealt with the issues referred to him. This will be fact-specific to each case and the nature of the issues in dispute. What is appropriate in one adjudication may not be appropriate in another.

A third thought came to mind. In Compton Beauchamp Estates Ltd v Spence, the arbitrator made his award dated 12 November, but only delivered it to the parties on 18 November. I seem to recall finding myself before HHJ Coulson (as he was then) when I reached my decision and didn’t deliver it to the parties for another few hours. Others have not been so fortunate! Here the arbitrator was afforded 6 days to deliver his decision.

A postscript on court judgments

It isn’t just arbitrators and adjudicators who have their decisions scrutinised by the courts. It sometimes happens to judges too, as the Court of Appeal’s judgment in Crinion v IG Markets demonstrates. Here the first instance judge, HHJ Simon Brown in the Birmingham Mercantile Court, took over 90% of his judgment from the claimants’ closing submissions. The Court of Appeal did not approve of this at all, saying that judges need to give properly reasoned judgments and reminding them to avoid “electronic plagiarism”.

I thought it was interesting to see a warning against judges lifting too much from one party’s submissions, however tempting it may be in this electronic age. I guess it is a reminder to anyone who writes a decision, award or judgment that if you accept one party’s submissions, you still need to be careful how you write that up. As Underhill LJ said:

“it was indeed thoroughly bad practice for the Judge to construct his judgment in the way that he did.”

I guess the difficulty is that, even if you have properly addressed both parties’ cases, to an outsider it looks like you haven’t. I think Longmore LJ put this point best when he said:

“In these days of written final submissions and computer literacy it must be tempting for a judge who has formed a clear view of a primarily factual dispute to frame his judgment by lifting large parts of the written submissions of the party he has decided should win and incorporating them in his judgment. But to do so without (or with only minimal) acknowledgment and without making reference to the submissions made by the other side inevitably leaves a deep sense of grievance with the losing party. He or she will understandably feel that the judge has never properly engaged with the case when forming his judgment.”

Some may be surprised that the defendant’s appeal was dismissed, but the Court of Appeal was satisfied that the judge had done what he was supposed to do.

I guess there are just some limits on Ctrl X, Ctrl C and Ctrl V after all.

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