REUTERS | Paulo Whitaker

No “near miss” theory in adjudication enforcement

I’m unsure if it’s now too late to say this, but happy New Year to you all. I signed-off 2013 by talking about my fear of Christmas games. Well, I can proudly say that I was on the winning team in a game of Articulate (I was also on two losing teams but let’s not go there). It made my Christmas. Anyway, I digress.

Adjudicators, arbitrators and judges have to be careful in the language they use in decisions, awards and judgments, particularly when they are dismissing weak points. For example, you might see an adjudicator write something along the lines of “I have difficulty in accepting X’s case on this point because…”. What the adjudicator might actually be thinking is “you can’t seriously expect me to find for you on this point because…” or, as I heard a site agent so eloquently put it at a recent adjudication meeting, “you’re having a giraffe”. Some adjudicators might go further in criticising parties or their representatives, but personally I tend to steer clear of this manner of drafting.

Another area where approaches differ is the amount of comment an adjudicator might include in a decision which is not strictly necessary to the outcome of that decision. I was interested to see that this is what the adjudicator did in Alexander & Law v Coveside.

Alexander & Law v Coveside

This case concerned the enforcement of an adjudicator’s decision following termination of A&L’s contract. The majority of Coulson J’s judgment concerns questions relating to insolvency and a stay of execution, but he also touched on some interesting points arising out of a comment the adjudicator made. After deciding that Coveside’s termination was wrongful and that considerable sums were due to A&L, the adjudicator stated that:-

“Having found that the termination was invalid I feel that it was necessary to say that this was not an easy decision to make and had the evidence supported Coveside’s views as set out in the Architect’s letters, I would have accepted that the notice of termination was valid. Unfortunately for Coveside when the available evidence is looked at many of the views expressed by the Architect are incorrect and needed to have been explored in far more detail. In order that termination can be effective, good evidence of the reasons/events relied on will need to be provided. Coveside were unable to satisfy me that the various letters and notices relied on were based on evidence as opposed to opinions and which in many cases were unsupported. This is not to say that the views expressed were not genuinely held and I level no criticism of Coveside or their design team by these comments. I do accept that the pressure of trying to get a project completed can and does lead to difficulties between the parties and occasionally entrenched views which it is very difficult to step away from.”

In my experience, adjudications arising out of terminations or repudiations are usually anything but straight forward. They can often turn on complex issues of fact and law, and the outcome can be dramatic. The party claiming wrongful termination will either succeed and be entitled to the damages flowing from the wrongful termination, or it will lose and the money will flow the other way. A&L v Coveside appears to have been no exception and I can therefore understand that the adjudicator might not have felt entirely comfortable with his conclusion.

No “near miss” theory

Whether the adjudicator was right to include this comment is a matter of personal preference. However, it did raise an interesting point in the enforcement proceedings. Coulson J said that Coveside’s counsel had suggested in his skeleton argument that where an adjudicator had to deal with complex issues of fact and law and had reservations about his own decision, “that may be a relevant factor to be taken into account by the court on enforcement”. In other words, there is a “near miss” theory.

Coulson J made it crystal clear that there is no “near miss” theory in adjudication enforcement because, provided the adjudicator had jurisdiction to reach his decision and he did not go about it unfairly, the decision will be enforced regardless of the adjudicator’s reservations and whether there are errors of fact or law in it. The adjudicator deciding the dispute is the end of the matter. Any lessening of that principle would undermine the whole adjudication process.

This closure of another potential loophole to avoid enforcement of adjudicator’s decisions must be welcomed and is yet more evidence (if we needed it) of the judiciary’s support for adjudication. For the sake of the construction industry, long may this support continue.

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