The SCL recently published a paper by HHJ David Grant, which he had presented earlier this year to a bunch of arbitrator and construction law types in Derby. The paper “Some pitfalls for adjudicators to avoid”, with its self-explanatory title, continued the themes of Coulson J’s talk “The perfect adjudicator’s decision“, which was given in May to a similar bunch of people, and which I wrote about at the time.
Both papers addressed the authors’ views on how, if adjudicators can get simple things right, their decisions are more likely to be enforceable and less susceptible to challenge on grounds of breaches of natural justice.
One aspect of HHJ David Grant’s paper caught my attention – the section on an adjudicator disclosing previous involvement with the parties. He refers to Edwards-Stuart J’s judgment in Fileturn Ltd v Royal Garden Hotel Ltd, and states that the obvious lesson from that judgment is for adjudicators to disclose. (I commented on this judgment at the time.)
HHJ David Grant goes on to comment that the judgment in Fileturn can be contrasted with his own judgment in Andrew Wallace v Noon  BLR 158 (TCC). I wasn’t familiar with this earlier decision, so took the opportunity to review it. He wasn’t wrong. The facts (and judgment) in that case surprised me.
Allegations of bias in Andrew Wallace v Noon
In short, the adjudicator was appointed via an application to the RIBA. Nothing unusual there. However, during the adjudication, Mr Noon (the responding party) became aware of two relevant facts concerning the adjudicator and Andrew Wallace Ltd (the referring party):
- That the adjudicator had conducted a mediation with the referring party just days before he had been appointed in this dispute.
- The adjudicator had also been involved in an adjudication with the referring party some three years earlier.
Neither event had been disclosed by the adjudicator and, quite properly, questions were asked. The adjudicator sought to explain himself, but the referring party remained dissatisfied with the answers he gave. Eventually the matter came before the court, with the responding party resisting enforcement of the adjudicator’s decision, alleging the adjudicator was biased.
Was the adjudicator biased?
Unsurprisingly, the judgment sets out the law and the test in Re Medicaments:
“Whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility or a real danger… that the tribunal was biased.”
The question for the court was whether, if the test in Re Medicaments was applied to the facts, the adjudicator’s involvement in the mediation (with its unrelated subject matter) would lead a fair-minded and informed observer to think he was biased.
The court said no. It gave a number of reasons, including the fact that the adjudicator had professional qualifications, including FRICS, FCIArb and that he was a chartered arbitrator. All of these were said to be relevant. The court also decided that the adjudicator had no personal knowledge of the parties and had been appointed by RIBA, not selected by the parties.
If in doubt disclose, its best practice
I’m not sure whether I should be surprised by the professional qualifications point or not. It isn’t the first time adjudicators have been called “professionals” (see Edwards-Stuart J in Fileturn) but arguably, as an adjudicator/arbitrator, one needs to be aware of the duty to disclose relevant associations and previous appointments. (See my blog on this.)
Therefore, I was surprised that the adjudicator didn’t disclose these two events. It is arguable that the earlier adjudication was irrelevant, but to conduct a mediation with one of the parties just days before an appointment as an adjudicator, and not mention it at all at the time of the appointment appears odd to me. We all know that there are parties (and their advisors) out there who are out looking for ways to trip an adjudicator up, and it seems unnecessary to give them such ammunition.
As HHJ David Grant says “when in doubt, disclose”. I would modify that slightly “even if not in doubt, still disclose!”