REUTERS | Ina Fassbender

Liar liar, pants on fire

This may be a children’s playground taunt, most commonly associated with accusations of dishonesty (it is actually paraphrased from William Blake’s poem, “The Liar”) but, in recent months, the courts have dealt with a number of cases where one party has alleged the other is guilty of fraud (or something akin to fraud).  (See SG South Ltd v King’s Head Cirencester LLP & Anor, GPS Marine Contractors Ltd v Ringway Infrastructure Services Ltd and Speymill Contracts Ltd v Baskind).

Alleging that all is not what it seems, as set out in a party’s submissions, is becoming increasingly common in adjudication. These cases testify to that.

While the courts have confirmed that an adjudicator may deal with fraud allegations, often it is difficult for the adjudicator to know which version of the facts before him is the correct one. Sometimes it may appear obvious that someone is stretching the truth, like when Mr Baskind alleged that all the relevant documents had been lost when a computer was stolen. But it isn’t always the case. For example, if the parties disagree over what was agreed (or not agreed) at a settlement meeting (like in GPS v Ringway), without hearing witness evidence, how can an adjudicator make a decision about the scope of the dispute?

In my experience, these sorts of arguments are often a distraction from the substance of the dispute. This is particularly so when the truth of what has been said does not go to an issue which falls to be decided. In such instances, and when faced with the “did” versus the “didn’t” type of exchange across the table in a meeting, I will ask the parties to explain the relevance of the outcome of their disagreement to the matters that I have to decide. I find that this often puts an end to what is really just a sideshow.

However, if the truth of a matter is relevant, then I sometimes find it useful to let the exchanges progress. That said, the question of whether I am persuaded by a version of events is usually determined by whether the contemporaneous documents and the parties’ actions are consistent with what the witnesses are saying.

It may seem obvious to say it, but whenever parties find themselves in this type of situation, they should explain and support their version of events by reference to what was said and done at the relevant time.

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