My heart sank when I read the judgment in Primus v Pompey. It’s a case that all adjudicators should read and take note of.
As an adjudicator, you are all too often faced with the responding party making challenges to your jurisdiction. Sometimes you think there is merit in the challenge and resign, other times you reject the challenge and continue with the adjudication. I wrote about resignation last month, after Coulson J’s decision in Bovis Lend Lease Ltd v Cofely Engineering Services.
In Primus v Pompey it was alleged the notice of adjudication was not properly served (it was posted, rather than being delivered by courier or fax, as the contract said). If the adjudicator had resigned when his jurisdiction had been challenged, the referring party could have corrected this error (the other three grounds for challenge were dropped by the time the case got to court). The judgment doesn’t explain why the adjudicator choose not to. On this occasion, I think the adjudicator got off lightly. The court will not always agree that, on the facts, the contract doesn’t actually mean what it appears to mean. Often it saves the parties considerable time and costs to resign and let the process start again.
Even if I give the adjudicator the benefit of the doubt over not resigning, I struggle to understand what happened on the loss of profit claim.
There is a difference between the adjudicator taking the initiative in adjudication (for example, giving directions for the timetable of the dispute), and relying on “secret” evidence. The case law on this is quite clear, and has been for some time.
If the adjudicator is going to introduce new evidence (such as obtaining an expert’s report), or has adopted a novel way of approaching the dispute (such as adopting his own methodology), then he must inform the parties and give them an opportunity to make submissions. As HHJ LLoyd QC held in Balfour Beatty Construction v London Borough of Lambeth, if the adjudicator has made good deficiencies in one party’s case, or overcome the absence of any evidence on a point with his own analysis, the adjudicator can no longer be described an impartial. An adjudicator has a statutory duty to act impartially (section 108(2)(e), Construction Act 1996).
It is not clear from the judgment how the adjudicator got himself into such a pickle, or whether he fully appreciated what the parties were saying when they agreed the referring party’s company accounts were irrelevant to the dispute the adjudicator had to decide.
Isn’t hindsight a wonderful thing!