REUTERS | Brian Snyder

Addressing jurisdiction challenges early and clearly

Last month I wrote about rule 6 of Coulson J’s “seven golden rules of adjudication“; his road-map for maximising a party’s chances of having an adjudicator’s decision enforced. This week I thought I would concentrate on rule 2, which I think also merits a comment.

Rule 2 deals with challenges to an adjudicator’s jurisdiction, which Coulson J suggested the adjudicator should address “early and clearly”.

Jurisdiction points are often taken in adjudication. Coulson J thinks that they are taken too often, with some being bad, others laughably bad. I would agree. I also agree that it is important for the adjudicator to deal with the point, when it is raised. If it is appropriate to do so, I will resign once I have investigated a jurisdictional challenge. It is much better to deal with the issue at the outset than to allow the parties to run up legal fees (and other costs), and then find themselves in the situation like the one the parties faced in Enterprise Managed Services v McFadden Utilities, where the adjudicator declined to deal with the issue and then the court held there was no jurisdiction.

Coulson J identified three types of challenge that he thought were the most common:

  • Where the responding party argues the adjudicator has:
    • no jurisdiction; or
    • limited jurisdiction.
  • Where the referring party says matters raised in the responding party’s defence fall outside the scope of the adjudicator’s jurisdiction.

No jurisdiction

On the first point, Coulson J suggested that adjudicators should apply robust common sense to challenges that involve “no dispute” arguments or raise issues about the process and procedure of their appointment. No one wants to be in the shoes of the adjudicator in Vision Homes v Lancsville. As ever, better to resign and get the parties to start again, than pushing on with all the consequences that may follow from that.

Limited jurisdiction

This, Coulson J said, was essentially about serial adjudication, where a later adjudicator is being asked to decide an issue that may (or may not) have already been decided by an earlier adjudicator. He was probably thinking about his judgment in Benfield v Trudson.

Serial adjudication is something that I am familiar with, and it is always a difficult one to deal with. It can be made more complicated if the parties are fighting the earlier adjudicator’s decision in enforcement proceedings.

Coulson J said this area needs caution from adjudicators. I couldn’t agree more.

Matters outside scope of jurisdiction

Coulson J said challenges to jurisdiction, based on the scope of the defence that an adjudicator may consider, were akin to an adjudicator having one arm tied behind his back. He referred to a number of recent decisions where the referring party has raised this (Quartzelec v Honeywell; Amec Group v Thames Water; Pilon v Breyer).

He suggested that the adjudicator should start from the presumption that he should consider all of the responding party’s defence. Only if it clearly falls outside scope, should the adjudicator decline to include it in his deliberations. I’m not sure how that really works in practice, since the whole point of the referring party’s submissions is to persuade the adjudicator that the defence falls outside the scope of the adjudication.

Final thoughts

Dealing with jurisdictional challenges is an integral part of acting as an adjudicator. It is no less important than writing the decision.

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