A couple of weeks ago I wrote about party-party costs and whether adjudicators are up to the job of dealing with the parties’ costs, if they have the power to do so. In setting out my thoughts on whether adjudicators do have the skills (and I think those with arbitrator training certainly do have), I didn’t mention some of the intricacies of costs, such as what happens if one of the parties asks the adjudicator to make a split costs or issues-based order. I thought about it recently, only because I was considering a different issue – should I allow the referring party to put in yet another submission – and I wondered what impact a further submission may have on the overall outcome of the adjudication, as well as whether it would incur further unnecessary costs at a late stage of the process.
In my example, the parties had contracted on the NEC3 ECC, but they had amended Option W2 to give an adjudicator the power to deal with costs as well as his own fees and expenses as between the parties. The dispute involved a number of issues and we’d been through a long exchange of submissions. The question was whether there really was a need for a reply to a reply to something else.
Just say no
The adjudicator can say no to late submissions (and I’ve blogged about this before, on more than one occasion). However, the adjudicator has to tread carefully, not least because the Scheme for Construction Contracts 1998 requires an adjudicator to consider information submitted to him (paragraph 17, Scheme). That obligation has to be balanced with an adjudicator’s right to control the process (paragraph 13, Scheme) and the fact that, if the adjudicator gets it wrong, there undoubtedly will be an allegation that the adjudicator has breached the rules of natural justice.
Sometimes it may be easier for the adjudicator to say yes to the late submission than it is for him to let on to the parties that he is not as up-to-speed as he perhaps ought to be at a late stage of the process. Alternatively, if the adjudicator is completely on top of the papers, he may be able to state with confidence that it is unnecessary and will not be allowed. In GPS Marine v Ringway Infrastructure, Ramsey J said:
“The Adjudicator was entitled to and needed to limit the number of rounds of submissions…”
“…parties to adjudication feel the need to keep making further comment on what the other party has said but the timescale in adjudication does not permit this.”
It’s a costs question
In the event, I allowed the referring party to serve the extra submission and I decided the majority of the issues in the referring party’s favour, making the referring party the overall winner.
As I had the power to deal with the parties’ costs (as well as my own fees and expenses), when I invited them to send me their schedules of costs, the responding party took a number of points about the referring party’s costs, including that there had been considerable time wasted in dealing with the extra submission at the late stage of the adjudication.
When considering the parties’ submissions on costs, I concluded that some costs had been incurred on points that the referring party had not been successful on and some costs were wasted in dealing with the late submission, which meant it was necessary to make a slight adjustment to the amount the referring party claimed. However, I adopted a broad-brush approach and reduced its costs by a small percentage, rather than spending time going through the various items on a line-by-line basis. I set this out in my award. I also took a similar approach with my fees, but concluded there was no need to adjust them as the time I had spent on the late submission was minimal. The responding party was therefore primarily liable for those too.
To all intents and purposes, it’s just like when a judge summarily assesses costs after a hearing. Some may consider the process to be a little on the crude side, but overall I’m sure that it is preferable to a detailed assessment, which simply eats up more of the parties’ time and costs.