The past couple of months have been somewhat lean for TCC judgments on adjudication and arbitration matters, so when our (brilliant!) editor at Thomson Reuters asked me what I wanted to write about this week the answer was not immediately obvious to me. There’s certainly been a lot on the news over the past week and, for once in 2020, there has been some good news. However, you’ve all got plenty of apps and networks giving you your news fix, so I won’t dwell on that. I had pondered discussing my top five movies of the 1980’s, but suspect I won’t get asked to write another construction blog if I do that.
I therefore glanced through the last 12 years of blogs that Matt and I have written, and noticed one of Matt’s from May 2010 when he covered what Coulson J (as he was then) had said at a Society of Construction Law meeting earlier that month about the seven golden rules for adjudicators. The question struck me as to whether those rules have stood the test of time (they have), and they seem particularly relevant at the moment as a number of nominating bodies have been recruiting new adjudicators to their panels over the past couple of years, including RICS.
What are the seven golden rules?
The seven golden rules for adjudicators have been repeated in Coulson LJ’s practitioner text on adjudication, Coulson on Construction Adjudication, which is now in its fourth edition. They are as follows:
- Be bold.
- Address jurisdictional issues early and clearly.
- Identify and answer the critical issue(s).
- Be fair.
- Provide a clear result.
- Do it on time.
- Do not make silly mistakes.
On their face, these rules have clearly stood the test of time and are as relevant today as they were 10 years ago. However, they still warrant some further discussion.
Rule 1: Be bold
Sir Peter rightly notes that adjudicators have a unique jurisdiction and that:
“… the need to have the right answer has been subordinated to the need to have an answer quickly.”
He also says that adjudication is all about ensuring that:
“… payment gets to the right people at the right time.”
These are still very relevant principles, but it is worth remembering that many adjudications are conducted after the sub-contractor or contractor has left site, and are not about ensuring interim cash flow. I did a quick tally of the decisions I’ve written this year, and only 15% concern disputes where the sub-contractor or contractor remains on site.
Where the dispute does not involve an interim payment on a live project, then perhaps the emphasis should be on getting the right answer, particularly as so many disputes don’t progress beyond an adjudication.
Rule 2: Address jurisdictional issues early and clearly
This golden rule is as important now as it was in 2010. It obviously applies to threshold jurisdictional challenges where the parties need to know as soon as possible whether the adjudicator intends to continue or resign, but on occasion it is also relevant to internal jurisdictional challenges.
For example, if a responding party contends that the adjudicator does not have jurisdiction to deal with a particular aspect of the dispute referred then it will assist both parties if the adjudicator makes a non-binding conclusion sooner rather than later as to whether they have jurisdiction to deal with it. It will be very frustrating to parties if they spend time and money dealing with a part of a dispute, only for the adjudicator to declare in the decision that they lack jurisdiction to deal with it.
Rule 3: Identify and answer the critical issue(s)
Issue identification is obviously one of the most important skills for any dispute resolver, but Sir Peter goes further and stresses the need to ignore the red herrings and:
“… avoid being too long-winded and instead concentrate on what they know to be the real point.”
Such red herrings are quite common in submissions, particularly in impassioned witness statements, but I feel that most adjudicators are pretty good at avoiding the temptation at spending unnecessary time dealing with them. That said, my experience of reading adjudicators’ decisions is mainly limited to where I am following another adjudicator or am assessing them for inclusion on ANBs, so many of you reading this blog will be in a better position to judge this than me.
Rule 4: Be fair
Sir Peter is obviously talking about fairness in the process, not in the substantive result of the adjudication, and he rightly notes the importance of adjudicators properly considering every aspect of the parties’ submissions. He goes on to say that if the adjudicator has planned out a timetable from the outset then the parties will know what they need to do and when, and:
“… disputes over (for instance) the admissibility of last-minute submissions will be much less frequent.”
I entirely agree that a clear timetable must be set at the outset, and my preference is for the parties to liaise and agree the timetable. Although in my experience this doesn’t necessarily lead to less disputes concerning last minute submissions, the important point is how adjudicators deal with these disputes, and I would recommend:
- Adjudicators ensuring that they have a good grasp of the submissions so that, when these disputes arise, they will be in a much better position to judge whether they require any further submissions and, if so, on what matters.
- Being bold enough (see Rule 1) to refuse permission for a further submission where it is unnecessary. Adjudicators can allay the concerns of a party on the receiving end of such a refusal by making it clear that if there is anything raised for the first in the other party’s (invariably late) submission that is likely to be material to the outcome of any of the issues in the adjudicator’s decision, then a further submission will be invited.
Rule 5: Provide a clear result
This is clearly vital to ensure that the decision is enforceable, if necessary.
I would also add the importance of giving clear reasons as to why the adjudicator has reached the relevant finding. For example, simply stating that “I accept the Referring Party’s case and I therefore adopt its valuation” is not an adequate reason in most cases, and the adjudicator needs to explain why they accept a party’s case.
I personally find it easier to set out my reasons for a finding in bullet point fashion, but I appreciate that this is a stylistic point. It is also worth noting that even when it can be challenging to articulate reasons (usually for the parties’ more obscure contentions), I try and resist the temptation to write “that is quite obviously wrong” because, in most instances, that will not suffice.
Rule 6: Do it on time
It goes without saying that the adjudicator must issue the decision within the statutory period or any extended period agreed by the parties, as pointed out by Sir Peter. He then notes that adjudicators should not allow the timetable to drift, and states:
“It is counter-productive to expand an adjudication from six weeks to three months, because it means that the parties have to spend a fortune, which they probably cannot recover, for a decision that either of them could challenge subsequently.”
While in most cases I would agree with this principle, in some instances it won’t be counter-productive to have a longer timetable.
Many substantial disputes are now dealt with in adjudication, and the parties treat it as a final dispute resolution process. Where there are meetings, site inspections, lengthy experts reports on different matters, numerous witness statements, and so on, a three month timetable or longer will be necessary. For example, I dealt with a dispute last year where it took me the best part of two months just to write my decision, such was the extent of it.
Matt also addressed the issue of “creep” in his blog 10 years ago, and concluded:
“I believe that it [the timetable] is for the adjudicator to judge (sorry Sir Peter!). The adjudicator is the one who has the facts before him, has a feel for the complexity of the dispute and an idea of how the parties are behaving when he has to decide these types of issues. If he insists on no creep, it is just as likely that the parties will say that he is being unfair, and cry ‘breach of natural justice’ on enforcement. But that is rule 4 (and something for another day).”
Rule 7: Do not make silly mistakes
Although some of the examples of silly mistakes given by Sir Peter seem obvious, it is surprising how many times they have cropped up in enforcement cases, for example ordering the wrong party to make payment.
As I raised the topic of my top five movies of the 1980’s, I’ve been pondering what I would include, so here goes (*reaches for the flak jacket as Raiders of the Lost Ark and ET have been left out, among others):
5. Return of the Jedi (I know the purists will say it should be The Empire Strikes Back, but I’m sticking with my choice).
4. Die Hard (is it a Christmas movie?).
3. Beverly Hills Cop (a great soundtrack too).
2. Ferris Bueller’s Day Off (a cult classic).
1. Back to the Future (an outright classic in my view, almost matched by the sequel).