REUTERS | Tobias Schwarz

Reasons for the decision, or were they?

Last year I wrote about the Scottish judgment of WH Malcolm Ltd and Lady Smith’s finding that the adjudicator’s views on a particular issue (SMM7) were not part of her decision, they were just part of her reasons.

Just before Christmas, Akenhead J looked at a very similar issue in Redwing v Wishart.

In Redwing, in the first adjudication, neither party had raised with the adjudicator the notion of adjusting the weekly contract fee payable under a prime cost contract. In addition to the original contract period, the contractor claimed the contract fee for the period of the extension of time it was claiming. Obviously the employer didn’t agree, he wanted the fee limited to the original contract period. Instead, it was the adjudicator who suggested that the contract fee could be adjusted and he set out his views in correspondence to the parties. Although the employer rejected the idea, the adjudicator carried these thoughts through to his decision. Importantly, he did not adjust the contract fee, but he did award it for the period of the extension of time.

The following year a dispute arose over the contractor’s final account and a second adjudicator was asked, among other things, to make an adjustment to the contract fee. To me, that looks like the contractor was rather taken with the first adjudicator’s arguments and chose to run with those arguments itself when there was a dispute over its final account. At this stage, the employer argued the contract fee issue had already been decided by the first adjudicator.

The matter then came before the court to enforce the second adjudicator’s decision. Akenhead J disagreed with the employer’s argument. He held that the issues dealt with by the second adjudicator were different to those dealt with by the first adjudicator and so the second decision was enforceable. However, he was critical of the first adjudicator for including within his decision material that was “a wholly unnecessary part of the decision”. As the adjudicator’s views on whether the contract fee was adjustable did not go to the issue of whether the contract fee was payable for the period of the extension of time claimed, it was irrelevant. Akenhead J was also critical of the first adjudicator for making a finding of fact when neither party had put forward any evidence on whether it intended the contract fee to be adjustable. He said the first adjudicator did not have jurisdiction to make such findings, which were, effectively, obiter.

At the time of Lady Smith’s judgment, I wondered whether her comments would cause adjudicators to reflect on how they write their decisions. Now that we have Akenhead J’s comments in a similar vein, it is clear that adjudicators should consider carefully what they include in their reasons. I see no harm in raising something with the parties during the adjudication (we’ve been criticised in the past for not doing so), but we really should stick to the issues in dispute when we write our decisions. I said the same after Lady Smith’s judgment. I wonder if I will be saying the same again in future.

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