Last week I looked at the natural justice issues that arose in the Scottish case, Paton and another, Re Judicial Review. Another aspect of Lord Ballantyne’s judgment also interested me – the evidence as to how the adjudicator decided what events were the cause of critical delay and warranted the granting of an extension of time to the contractor.
Delays are part and parcel of a construction project. Sometimes those delays are not critical to the project’s completion date, other times they are. Over the years, a great deal has been written about the methodology that should be adopted to work out which delays were critical and entitle the contractor to more time, and which do not. Experts in construction disputes often opt for the critical path analysis method. However, it isn’t the only method available.
What the adjudicator did in Paton
In Paton, the adjudicator, Mr Strathdee, did not adopt a critical path analysis when deciding the contractor’s delay claim. Instead, he looked at the contract programme (a simple bar chart), the site meeting minutes and other documents. In his evidence to the court, the adjudicator said that he was “able to identify by eye the critical events” when the project and its programme were simple, as in this case. He also did not think the project’s programme lent itself to a critical path analysis, as there were no logic links.
He said the first critical event was the supply of stonework (which the Patons were providing to the contractor). With regard to another event, the “superstructure walling”, the adjudicator said he made an “informed guess” when deciding when the stonework walling should have started. The adjudicator relied on the architect’s assessment for other relevant events. In doing so, the adjudicator used his own knowledge and experience, gained over many years as a quantity surveyor and arbitrator/adjudicator.
What the Patons’ expert said
In his evidence, the Patons’ expert, Mr Shields, accepted that it wasn’t necessary to establish a critical path analysis in order to assess an extension of time claim and that, in this case, it was appropriate to make an assessment using meeting minutes, photographs and correspondence. He also accepted that there was nothing wrong with the adjudicator using his own knowledge and experience. That said, he thought the adjudicator should have given the parties an opportunity to comment on what he saw as the relevant events.
Opportunity to comment
This “opportunity to comment” argument was at the heart of the Patons’ challenge to the adjudicator’s decision. The Patons argued that the adjudicator should have put his initial conclusions to the parties, particularly as he was adopting the “broad brush” approach advocated by the contractor, rather than a more forensic critical path analysis.
The contractor’s position was that these sort of issues are just the type of issues that are “normally put to an adjudicator by parties and upon which adjudicators had to make assessments”. This is what happened. Lord Ballantyne also agreed, and so the Patons’ application failed.
Deciding what delays are critical
It is important for an adjudicator to remember that he can use his own knowledge and experience when deciding matters referred to him and that he does not have to go back to the parties if he does that in relation to an argument or contention advanced by one of the parties. Even if the adjudicator reaches a conclusion that differs from either parties’ contentions on an issue, that does not mean he has to go back to them for their further input. However, if he strays and starts deciding matters not advanced by the parties, then he is in danger of going off on a “frolic of his own” and he should revert to the parties for comment.
This all sounds simple. In a 28-day process (even if it is extended), sometimes it is, sometimes it isn’t. For instance, it isn’t hard to work out that if the contractor is building a swimming pool, digging the hole must come before the tiling or installation of the water filter system. But most projects are far more complex and then your own knowledge and experience becomes vital. Afterall, as I said last week, surely that is why we are appointed in the first place.
It is not for me to second-guess what the did adjudicator in this case. However, I was pleased to see that Lord Ballantyne considered there was no unfairness in the adjudicator’s approach.
A final thought?
What about the flip side? What if Lord Ballantyne had found that the adjudicator should have reverted to the parties on his initial conclusions, despite the fact that he wasn’t going off “on a frolic of his own”?
If that was the case, at what point would the adjudication process end? Surely the courts would not endorse a process where the parties not only put forward their own case and respond to the other party’s position, but would also be making submissions on the adjudicator’s initial conclusions. If they did, the end result would be to extend the length of the adjudication and to create uncertainty as to when the process would actually end.