We are all familiar with the principle in English law of precedent and its binding or persuasive nature (depending on where the precedent comes from). We are equally familiar with the court’s ability to distinguish one judgment from another, to not follow previous authority or precedent and to rely on the individual facts to do so. It is well-established that each case will turn on its own facts and it is precisely because of this principle that it is often difficult to predict which party will be the more successful one in any claim that reaches the courts.
Predicting outcomes is difficult, to say the least, and, I suspect, it is even more difficult to predict the outcome in adjudication proceedings. This may be because adjudicators’ decisions are interim-binding and there is no way for parties to know how an adjudicator may decide a particular issue or how that issue has been decided previously (we are not yet at the point of publishing all of our decisions). Only if the matter has come before the court on enforcement do we have a clue as to the adjudicator’s decision and reasoning. Even then, we seldom get to see the whole picture, just those parts of the adjudicator’s decision that are relevant to the issues on enforcement.
All this is a long-winded way of saying that adjudication is (and probably always will be) somewhat unpredictable. I’d suggest the same could be argued about adjudication enforcement proceedings. Although different issues arose in each case, I think two recent judgments support my unpredictability argument. They are Akenhead J’s decisions in ABB Ltd v BAM Nuttall Ltd and Thameside Construction v Mr and Mrs Stevens.
ABB v BAM
In a nutshell, in ABB v BAM the enforcement proceedings revolved around whether there was a material breach of the rules of natural justice because the adjudicator had taken into account a particular clause (clause 11.1A) in the parties’ sub-contract that neither party relied on, and did not raise this fact with the parties before he published his decision.
Akenhead J held that the failure to allow the parties an opportunity to comment on his approach to resolving the dispute meant that there had been a material breach and the decision should not be enforced. The breach was considered to be “material” because, in part, there was “a very realistic prospect of success for ABB on the clause 11.1A point if the adjudicator had seen fit to mention it”. It was also clear that the adjudicator had “attached real importance to the impact of clause 11.1A in reaching his decision”.
Jonathan Cope looked at this issue and I will say no more about the details.
Thameside v Mr and Mrs Stevens
Here the enforcement proceedings were primarily concerned with whether or not the employers, Mr and Mrs Stevens, could set off liquidated damages against a sum due to the contractor under an adjudicator’s decision. Akenhead J said no, they couldn’t, they had to honour the decision. This issue was looked at by Charles Pimlott (who represented Thameside) and was unsurprising, since it followed established principles.
However, of particularly note were the judge’s comments about the error that the adjudicator made when he “left over ‘to another day'” issues related to the date of practical completion, extension of time and liquidated damages. The adjudicator may have made reference to them in a footnote, which the judge said was like an “obiter type of finding”, but he was in error by doing so. The question of liquidated damages was raised by the Stevens’ as a defence by way of set-off and “did not fall outside his jurisdiction”. In determining whether liquidated damages were payable, the adjudicator should have looked at when the Stevens’ went into possession or occupation and whether Thameside were culpable for failing to complete the works by the extended completion date.
Given this error, the judge seemed surprised that the Stevens’ did not run a jurisdictional challenge but, instead, expressly disavowed any challenge. Perhaps it was because they had already paid part of the adjudicator’s decision, and there would have been an approbation/reprobation argument if they had tried to challenge jurisdiction. Alternatively, perhaps they were happy with his decision, subject to their set-off, and didn’t want to incur the additional expense of another adjudication. Whatever the Stevens’ reasons were, I suspect the court would have found the adjudicator erred sufficiently not to enforce his decision, if the challenge had been made. This too would be following usual principles.
Conclusion, if there can be one
So there you have it, two judgments, two very different sets of facts and two very different outcomes, with each case turning on its own facts. On the one hand the adjudicator went too far and considered too much (ABB v BAM), on the other hand, he didn’t go far enough (Thameside). One decision was not enforced (ABB v BAM), the other was (Thameside). This may have been for very different reasons but, as I said at the start, it’s an unpredictable game. Talking of which, what are the odds of West Ham staying up this season??