I read a nice little judgment the other day. It was by Lord Glennie in the Scottish Court of Session. One of the issues before the court was whether the adjudicator had made a number of mistakes when reviewing one of the parties’ submissions, meaning that he either exceeded his jurisdiction, failed to exhaust his jurisdiction (there is that phrase again) or was in breach of the rules of natural justice.
Atholl Developments (Slackbuie) Ltd
In Atholl Developments, there was a dispute over the value of the contractor’s final account. Somewhat unusually, the employer (Atholl), referred the matter to adjudication.
The employer alleged the contractor’s final account was valued at £5.4 million, whereas the contractor put forward a value of £7.9 million. The adjudicator decided it was worth £6.2 million. That was more than the employer alleged, but significantly less than the contractor claimed.
The contractor then started another adjudication (with the same adjudicator) for an order that it was entitled to the balancing sum (some £350,000). The adjudicator duly awarded the contractor its order and the employer cried foul in the courts.
Employer challenges adjudicator’s decision
Before the court, the employer challenged the adjudicator’s first decision, alleging that the adjudicator made a number of mistakes. The employer’s counsel took the best part of a day to take Lord Glennie to each of these alleged mistakes.
Lord Glennie noted that the adjudicator may have “fallen into error” or was “plainly wrong”. However, given the time the adjudicator had to decide these issues, and the difficulties he had to overcome with the paperwork (he did not have the benefit of a detailed presentation, but had to deal with 16 files of papers arriving during the course of the adjudication), Lord Glennie was not prepared to go against established case law and grant the employer its application.
You can’t squeeze a quart into a pint pot
Everyone knows that making mistakes is one of the risks in adjudication. Lord Glennie put it succinctly when he said:
“[The adjudicator] may have failed to notice a point made by [the employer], or a matter of detail appearing in their own version of the Final Account. If so, so be it. That is adjudication, for good or ill.”
One of the things that struck me in all of this is that the adjudicator asked for more time beyond the 42 days allowed by the Construction Act 1996. He was only allowed an extra two days.
If that was the case, then the fact that there might be mistakes or errors in his decision may actually be a result of trying to “squeeze a quart into a pint pot”, that is, trying to do too much in the time allowed. As I see it, despite the fact that an adjudicator has to reach his decision in the time allowed, if the parties want a more thorough investigation then they should be prepared to give more time to the adjudicator (and thus pay more for the end product). Otherwise, adjudication will continue to be “rough justice” for the few.