I have written about bias on several occasions, including to discuss Edwards-Stuart J’s judgment in Fileturn v Royal Garden Hotel last summer. On that occasion, the issue before the court was whether there was bias because of an alleged pre-existing relationship between the adjudicator and Fileturn’s representative in the adjudication. At the time, I wrote that I was pleased the court rejected the argument, noting that the world of construction adjudication is a small one. I don’t want to think about the implications if it had gone another way.
I was equally pleased to see Flaux J in the Commercial Court adopt a similar common sense approach to the question of unconsicous bias in A v B.
The facts of A v B will seem very familiar to construction lawyers:
- A and B were involved in a dispute, which was referred to arbitration in March 2009.
- X was appointed as the arbitrator. X was a QC with financial law experience.
- The main arbitration hearing took place in September 2010, with judgment reserved until December 2010.
- A was initially represented by SJ Berwin LLP (and then White and Case, after the solicitor moved firms). B was represented by Dewey & LeBoeuf LLP.
Meanwhile, back in 2004, X had advised in an unrelated dispute – the Y litigation. That litigation had settled in March 2008, but was revived in November 2009 and went to trial in November 2010. The Y litigation was relevant simply because X was instructed by Dewey & LeBoeuf in that litigation. There were no other common factors.
Flaux J described the arbitrator’s failure to advise the parties in November 2009 about the revival of the Y litigation as unfortunate and inadvertent. He suggested that if there had been disclosure at that time, it may have averted the application to remove the arbitrator, arguing unconsicous bias and relying on section 24 of the Arbitration Act 1996. As it was, A’s application to remove the arbitrator was made the day after X’s award (which didn’t go so well for A).
A advanced a number of arguments to support the allegation of unconsicous bias. Flaux J rejected all of them.
Flaux J did not consider that the fair-minded and informed observer, who is presumed to know how the English legal profession works, would consider that there was a real possibility of apparent bias or unconscious bais, merely because X had acted as counsel for Dewey & LeBoeuf in other litigation (whether in the past or in parallel with the arbitration). He rejected the idea that X may not want to disappoint Dewey & LeBoeuf.
The thought struck me that in the world of construction, we’d all be stuffed if Flaux J had decided differently. While there may be many chambers that deal with construction matters, there are only a few “big hitters”. It is these big hitters that would find themselves in trouble, as would the judiciary – a point that Flaux J noted himself:
“It is a fact that judges of the Commercial Court (whether through having been instructed by particular firms of solicitors whilst at the Bar or through experience of case management and trial of cases as judges) build up a picture of the strengths and weaknesses of particular firms of solicitors or indeed of individual solicitors, just as they do of individual members of the Bar. Accordingly they will have more confidence in some firms or individual solicitors (or members of the Bar) than in others. No-one could sensibly suggest that a judge should have to recuse him or herself in such situations. Were that so, there would be no judges sitting.”
Relevance to adjudication?
This all happened in litigation and arbitration proceedings, which are notorious for running and running. In the much tighter timescales of adjudication, it is possible that such a scenario may not present itself. However, this judgment acts as a reminder that we all need to consider who our instructions are coming from and whether we need to disclose at least the existance of other instructions. That this isn’t just at the start of the process is amply demonstrated by the position X got himself into.