REUTERS | Andrew Winning

Exceeding the speed limit: time in adjudication

In September last year, under the heading unreasonable skill and care, I looked at the dilemma facing professional people who need to strike a balance between giving advice in the timescale required and taking long enough to be as confident as they can be that the advice is correct.

20 minute warning

One reaction to that post was from a friend who worked in-house for a building contractor. He told me that his boss had asked him to review a rather complicated contract, giving him only 20 minutes to do it. The aggravating factor was that it was beyond doubt that this limitation would not be taken into account at his annual appraisal if the quality of the advice subsequently given fell short of the standard of a polymath and prophet.

My passion for the irrelevant forced me to tell him the true, but unhelpful, story of some advice I had recently received from a financial adviser. After the usual lengthy disclaimers and warnings they had written a short paragraph saying that, due to the turmoil in the financial markets, they were not in a position to make any recommendations. Accompanying the letter was an invoice for the advice (which they later withdrew).

Adjudication: quickly, or not at all?

I suppose a more relevant but even less helpful reply might have been to refer him to the advice given to adjudicators in Enterprise v McFadden:

“the adjudicator has to decide at the outset whether or not he can discharge his duty to reach a decision impartially and fairly within the time limit prescribed… If he cannot, he ought to resign.”

So, faced with the choice between waiving his salary and resigning my friend gave the advice, for better or for worse. His decision foreshadowed the rather more helpful approach adopted by Mr Justice Coulson in Amec v Thames Water (quoting Chadwick LJ in Carillion Construction v Devonport Royal Dockyard):

“The need to have the ‘right’ answer has been subordinated to the need to have an answer quickly.”

Fortunately or unfortunately for all concerned (depending on your point of view) my friend’s company did not win the contract so the advice was never tested.

A certifying architect or engineer would not resign, so why should an adjudicator?

The advice to adjudicators to resign always seemed to me to run contrary to the absolute right to adjudicate any dispute, especially given the subsequent right to litigate or arbitrate. We would never suggest that an architect or engineer being asked to grant an extension of time should resign if it was all just too difficult for him to cope with.

So why the difference? The answer of course is that adjudication is different from certification. It is a quasi-judicial process and concepts like natural justice apply. So are we saying that Parliament’s will, set out in the Housing Grants, Construction and Regeneration Act 1996, can be thwarted? Or are we looking for a way of reconciling two competing legal theories and seeking a “score draw” where both emerge with honour and stay friends?

I think we are doing the latter. Although there might be cases which cannot be adjudicated, they are probably very rare. In most cases there is a way through to a result that will stand on its own two feet, at least temporarily.

However, whatever you do, don’t take too long

At the other end of the spectrum is Yule v Speedwell Roofing, which says:

“…benefits of speed and certainty underpin the statutory requirement that the decision of the adjudicator shall be provided within 28 days (or any extended period that is agreed), and not thereafter. This makes it important that both the [Construction Act 1996], and the Scheme, are construed purposively to ensure that those objectives are maintained.”

…the sting in the tail being that if the adjudication takes too long it will be void (although the parties can waive their right to claim that a delay will have that effect).

Minimum and maximum speeds

So, in a sense, there are two speed limits. Yule shows us the minimum speed limit and the natural justice cases show us that there is also a maximum speed limit.

If you try to do too much that is as bad as doing too little.

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