We all know (from bitter experience) that conferences and seminars can vary in quality. You can come away from some feeling exhausted by the breadth and depth of what you’ve learnt (for example, the recent TeCSA Adjudication conference was excellent), but others have left me wondering why I bothered making the effort to go (but I’m not naming and shaming!). However, even at the latter you can expect to learn something during tea or lunch breaks.
I was not disappointed at a recent conference when, during one of the tea breaks, I was involved in a conversation about an adjudication. One of my fellow adjudicators was explaining some horror or other that had occurred during the adjudication. When another delegate asked him who the parties were, he simply replied, “I’m not going to tell you that old chap, it’s confidential!”. Quite right I thought, but I then started pondering that age old question about whether adjudication is confidential and, if so, on what basis.
The basis of confidentiality (or lack of it)
Matt wrote about confidentiality in adjudication a couple of years ago after attending a lecture that Sir Vivian Ramsey had given at the Worshipful Company of Arbitrators’ Annual Master’s Lecture. Matt talked about the fact that the Construction Act 1996 does not refer to adjudication being confidential and, while paragraph 18 of Part 1 of the Scheme for Construction Contracts 1998 refers to documents being confidential, that only appears to be if one of the parties expressly indicates that the documents are to be treated as confidential.
The government’s consultation on amending the Scheme asked respondents for their comments on the possibility of making adjudication confidential, but nothing came of it. In fact, as far as I’m aware, the only adjudication rules that express the need for confidentiality are the TeCSA rules (rule 33 of version 3.2). So, unless the TeCSA rules apply, or the parties amend their contracts to provide for confidentiality, it may be that those involved in adjudications can talk about them to their hearts content.
Indeed, in the absence of a contractual confidentiality clause, some or all of the professionals involved in adjudications may actually have a duty to disclose aspects of those adjudications. For example, some professional bodies require their members to report fellow members for breaches of rules and regulations unless a duty of confidentiality applies.
The importance of confidentiality
Clearly, an adjudication is no longer confidential if:
- The parties go to court to enforce the adjudicator’s decision, seek some form of declaratory relief and/or to have the merits of the case heard at trial.
- There is a subsequent referral of a dispute to another adjudicator.
However, with the exception of these situations, I think it is essential that everyone involved in an adjudication maintains confidentiality unless they are required to disclose details (whether by their professional bodies or by law) because:
- Parties like the fact that adjudication is a confidential process (even if technically, they might be wrong in this assumption). Just as with arbitration, it is an opportunity to resolve disputes without the sordid details being aired in public. This is a very important consideration for some organisations and public bodies.
- The interim nature of an adjudicator’s decision means it isn’t binding (unless the parties want it to be) and cannot set a precedent. If, all of a sudden, we started to see adjudication decisions being reported, this could set a very dangerous precedent.
This second point was succinctly made some years ago by Liam Holder, a quantum expert, in a letter to Building in response to an article that named the parties to an adjudication in circumstances where the adjudicator’s decision had not gone to court to be enforced. Liam said that the reporting of this case:
“…suggests the adjudicator’s decision will have set some sort of precedent, which of course will never be the case. To refer to it as a “landmark case” is misleading and inappropriate. Adjudicators are not bound by decisions in other adjudications, not least because they shouldn’t know about them!”
So what to do (if anything)
Back in 2010, Matt posed the question of whether we would see an increase in the use of confidentiality agreements in adjudication. I certainly haven’t seen such an increase, and nor has Matt. Another alternative would be for adjudicators to include a provision in their terms regarding confidentiality, although this is unlikely to bind the parties or other professionals involved.
It may be that we make do with the status quo, which is all very well until someone at a conference decides not to exercise discretion…
I thought the point of Adjudication was a speedy interim remedy; if confidentiality is the primary concern then go to Arbitration.
Peter, thanks for your comment. I don’t think that the primary concern is necessarily confidentiality, it’s just one of the important factors in adjudication. I see no reason why we can’t have a confidential speedy interim remedy?
It seems to me that if the parties desire confidentiality then that is a matter they can resolve by contract rather than foisting a secret remedy on the world at large in the guise of a unique selling point.
You say that the confidentiality clause in an adjudicator’s appointment is unlikely to be binding. Why is this? The results of my adjudication have recently been given to a reporter, despite the confidentiality clause we signed up to in the adjudicator’s appointment.
I find it very difficult to believe that there might be no redress for the damage caused by this.
If this is the case, then trust in the process of adjudication will be seriously eroded. We would certainly be very wary about using it again. Is there anywhere I can raise this formally?
We cannot give advice through this blog, but I suggest you consider the parties’ underlying contract and establish the scope of any confidentiality clause it contains. You may also need to look carefully at the adjudicator’s appointment to establish exactly what the confidentiality clause says and what breach has occurred. You should also check the rules the adjudication proceeded under. However, as Jonathan explains:
Thanks, I am getting legal advice on this. This confidentiality clause in the Adjudicator’s appointment reads,
‘The Adjudicator and the Parties shall keep the adjudication confidential, except so far as is necessary to enable a Party to implement or enforce the Adjudicator’s decision.’