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More thoughts on adjudication in Ireland

A few weeks ago I wrote about the Adjudication Society’s regional conference in Dublin that considered the introduction of statutory adjudication in Ireland through the Construction Contracts Act 2013 (CCA 2013).

On that occasion, I highlighted possible issues with the enforcement of an adjudicator’s decision. This time, I’m looking at a few of the other issues that came out of the day.

The CCA 2013 refers to a number of features that may be unfamiliar to users of English adjudication or, at least, unfamiliar in the way they are described in Ireland.

Adjudicator’s code of practice

One example is reference to a code of practice. Although the CCA 2103 requires the adjudicator to act impartially, it also requires him to comply with “the code of practice for adjudication published by the Minister” (section 6(8)).

While acting impartially is familiar to us (and is embodied in section 108(2)(e) of the Construction Act 1996), complying with a code is not, unless you compare it to the requirement for an adjudicator to comply with the rules of natural justice. This may be what the code is getting at, since the draft code contains a provision that the adjudicator will:

“observe the principles of procedural fairness and act impartially and independently and without bias.”

Fair, impartial, independent and unbiased are all very familiar terms. However, our rules of natural justice in adjudication have developed over many years through case law. Even if those principles are set out in a code in Ireland, undoubtedly parties will still seek to push the boundaries of what they mean at the enforcement stage.

Other features of the draft code include:

  • A right for the adjudicator to continue with the adjudication when there is non-compliance with a request or direction, or the adjudication timetable. The adjudicator can draw such inferences as he thinks are justified in those circumstances.
  • Flexibility in terms of submissions, evidence, meetings, site visits and directions that the adjudicator requests or gives.

The adjudicator’s powers, as set out in paragraph 13 of the Scheme for Construction Contracts 1998, spring to mind here.

Timing of the adjudicator’s appointment

Under the CCA 2013, the parties must agree who will be the adjudicator within five days of the notice of adjudication (section 6(3)). Failing agreement, the adjudicator will come from the Minister’s panel (which is set up under section 8).

In England, we are used to parties agreeing one or more named adjudicators or adjudicator nominating bodies (ANBs) in their contracts, who are then approached when a dispute arises. However, the concept of agreement on the adjudicator’s identity post dispute is alien to us. If, in Ireland, an adjudicator’s identity must be agreed, but can only be agreed after a dispute arises, that suggests a list of names in a contract may be a way of promoting agreement post dispute. It’s still no guarantee and it will be interesting to see how often the Minister’s panel is called into action precisely because the parties cannot agree.

Also, as here, there is no mention of what happens if you don’t like who the chair of the Minister’s panel appoints to be your adjudicator. It remains to be seen whether a party loses its right to adjudicate if it fails or elects not to refer a dispute to an adjudicator appointed by the Minister (because, for example, it does not like the person appointed). I’ve heard it suggested this may be the case because the CCA 2013 provides for the referral to be served seven days after the Minister appoints an adjudicator and the adjudicator is seized with the dispute at the date of appointment. If that’s right, no-one else can be appointed and a situation like Lanes Group plc v Galliford Try Infrastructure Ltd could not arise.

Wednesbury unreasonableness

Now we all know that an adjudicator is not a public body and his decision is not open to judicial review. That means the Wednesbury unreasonableness test does not apply (although I have seen Julian Bailey suggest that adjudicators should be seen as exercising power derived from statute and thus are subject to public law).

The buzz in Ireland is more in keeping with Julian’s thoughts. It has been suggested that adjudication there may fall under the statutory umbrella and that adjudicators may be open to judicial review and the Wednesbury unreasonableness test. This is partly based on the fact that the only ANB (when it is set up) will be run by the Minister.

It is hard to predict what this may mean for how an adjudicator conducts an adjudication and what arguments may be run to suggest that the adjudicator’s decision is so unreasonable that no reasonable adjudicator acting reasonably could have made it (the Wednesbury unreasonableness test from Associated Provincial Picture Houses Ltd v Wednesbury Corporation).

If we assume the Wednesbury unreasonableness test applies, I suspect things like the fairness of the procedure that the adjudicator adopts may be caught. This may cause adjudicators to reflect carefully on what they do. For example, will they ordinarily meet with the parties and, if they do, whether that meeting will take the form of a hearing with examination and cross examination of witness and/or experts. Also, other factors may be dragged in to this. For example:

  • How far can the adjudicator go in relying on his own knowledge and experience?
  • What are the limits on the adjudicator exercising his initiative?
  • What should the adjudicator do if the responding party refuses to take part, or refuses to comply with his requests or directions?
  • What if the parties suspect the adjudicator has gone off on a frolic and hasn’t given them an opportunity to comment on something that he is relying on?
  • What if the adjudicator has failed to give reasons for his decision, or the reasons are considered inadequate?
  • What if the dispute cannot be dealt with in the statutory time limits, especially because the adjudicator has to have that meeting, with all that examination and cross examination?

All good bloggable stuff no doubt but, in practice, it could be expensive for the parties to find out where these boundaries lie and whether, in fact, the Wednesbury unreasonableness test does apply.

Need for fair procedures

One of the talks I attended at the conference ended with an extract from McMahon J’s judgment in Khan v HSE, as Irish employment case involving a consultant psychiatrist. I shall borrow that to end this post:

“To those involved in administration, adherence to fair procedure standards may appear cumbersome, irritating and even irksome on some occasions… But that is the way it is. The battle between fair procedures and efficiency has long since been fought and fair procedures have won out. The insistence on fair procedures governs all decision makers in public administration. It governs the courts as well. None of us can ignore the principle… Fair procedures are at the very foundation of all legal systems and all decision makers must observe them whether we like it or not. Fair procedures are necessary for the common good…”

What does fair procedure mean?

In Khan v HSE, McMahon J looked at what fair procedures mean:

“At the very minimum it means that the person at whom a charge is levelled has proper notice of the charge; that he has proper opportunity to take legal advice and to prepare for hearing; that no one is to be a judge in their own cause; that both parties are given a full opportunity to be heard and that the judge is free from bias. Moreover, it is clichéd law that not only must these principles be adhered to, but they must be seen to be adhered to. Justice must be seen to be done. Perception is significant and this is vital in the present case.”

MCMS Ltd Matt Molloy

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