REUTERS | Andrew Winning

Serving a statement of case in adjudication

Adjudication enforcement decisions often throw up interesting discussion points and two judgments from last week are no exception. The first concerned Lord Malcolm’s decision in Whyte and Mackay v Blyth & Blyth, where the court considered the adjudicator had breached the rules of natural justice as there was a “very significant omission” in his decision and reasoning. While that of itself would make a good blog topic (and is something Jonathan will be looking at), it was the application of Article 1 of the First Protocol of the European Convention on Human Rights (ECHR) that is more likely to attract commentators north and south of the border. In fact, Alastair Walls has written about it today.

The second judgment, Ramsey J’s decision in Willmott Dixon v Newlon Housing Trust, is the one I’m interested in.

Willmott Dixon v Newlon Housing Trust

This was a reserved judgment from a hearing back in January. It concerned two adjudications, which the referring party (Wilmott Dixon) referred to John Riches on the same day in October 2012. One was concerned with liquidated damages, the other something to do with a basement (water ingress perhaps, the judgment doesn’t say).

One of the issues before the court was the service of both referrals on the adjudicator and the responding party (Newlon). In a nutshell, in both adjudications a document called a “referral” had been served on the adjudicator as required by the CIC adjudication procedure, along with a folder of copy documents. However, it appears that those referrals were not included in the folder of copy documents served on the responding party and were only served after the responding party had served its two responses. It was because the responses both referred to a referral document dated July 2012 that triggered a realisation in the referring party that the referrals were not in the folder of copy documents it sent earlier that month.

I anticipate much angst in Wilmott Dixon’s offices that morning. The responding party started asking questions about what the adjudicator had received, which was confirmed in correspondence. He did get the referrals in the copy documents folder. The responding party then served two rejoinders but did not significantly change its case. Interestingly, it seems the responding party did not reserve its right to challenge the adjudicator’s jurisdiction at this point or, if it did, it wasn’t something that was addressed in the enforcement proceedings. The judgment doesn’t explain what its witness statement said.

Would the adjudicator’s decisions be enforced?

At this point in the judgment, I began to wonder whether the adjudicator’s decisions would be enforced. After all, you would imagine that it is a fundamental tenet of adjudication that the responding party sees the case it has to answer. However, perhaps somewhat surprisingly at first blush, the failure to serve a “referral” on the responding party did not undermine the adjudicator’s jurisdiction.

Ramsey J held that the adjudicator did have jurisdiction because he had been properly served. That was the important issue. It didn’t matter that the responding party had not received a document called a “referral”, as the CIC adjudication procedure (clause 14) required a statement of case, which would include:

“a copy of the Notice, the Contract, details of the circumstances giving rise to the dispute, the reasons why it is entitled to the redress sought, and the evidence upon which it relies.”

Ramsey J said the covering letter and copy folder of documents was sufficient to be a statement of case. He took support from the fact that the responding party knew the case it had to answer, otherwise its rejoinders would have been drafted differently. He considered the parties’ partnering arrangements meant they had agreed to cooperate, and such cooperation extended to resolving disputes too. He also thought the CIC adjudication procedure required the parties to reach a “fair, rapid and inexpensive decision” and that was not one where technical breaches of the rules were taken to prevent an adjudicator’s decision.

How could it have been different?

Hindsight is a wonderful thing. With it, I’d suggest that the covering letter and both referrals ought to have been sent electronically, with additional copies in the copy folder that was sent by courier. That way there should be no question of the adjudicator and the other party receiving different documents.

As an adjudicator, I usually issue my directions before the referral is received. In those directions, I usually ask for all correspondence and submissions to be provided electronically to me and the other party, with a hard copy of submissions and supporting documentation to follow by post. While I accept that it may not always be practicable for extensive supporting documentation to be provided in electronic format, I do find it can assist me. Although, perhaps, an unintended consequence, it also means I know I am considering the same submissions and evidence as the parties!

Obiter comments on Systech

Finally, I was particularly interested to see Ramsey J’s comments on the application of PC Harrignton v Systech. They may have been obiter, but add support to the view that the circumstances in which an adjudicator is not to be paid are limited.

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