Jeux Sans Frontières

24/11/2020

During the 1970s millions of us spent Friday evenings gathered around our TV sets to watch the latest instalment of ‘It’s a Knockout’. This hugely entertaining spectacle saw teams of adults, routinely wearing large foam rubber outfits, being required to negotiate various hazards and obstacles placed in their path or launched at them by the opposing team. The props and weaponry might include hurdles, greasy poles, portable swimming pools, elasticated ropes, custard pies, water cannon and giant foam footballs.
Each team represented a town or city and each week the winning team would qualify to take on Johnny Foreigner in an exotically named event called ‘Jeux Sans Frontières’. This was exactly the same thing, only bigger and better and comprised six to eight international teams representing countries from across mainland Europe.
So what relevance has all this to adjudication? Well, it seems to me that there’s a clear parallel between the adjudicator struggling to avoid the potential pitfalls of running an adjudication and the fella trying to wade through an ocean of soap suds whilst wearing a foam rubber giant’s outfit.

My point is that an adjudicator has to tread extremely carefully and if he drops his guard for one second, he could be in bother. The party that loses an adjudication is seldom happy with the outcome and will often explore various strategies to avoid paying up. Ever since the early days of statutory adjudication the losing parties have sought to resist the enforcement of the adjudicator’s decision on various technical grounds.
In short, they attempt to ‘knockout’ the adjudicator’s decision by inviting the courts to agree that a decision is out of time, or that an adjudicator has exceeded his jurisdiction, or that the rules of natural justice have been breached.

An early example was the well-known case of Balfour Beatty Construction Limited v London Borough of Lambeth [2002] EWHC 597 (TCC). In this adjudication the adjudicator considered that Balfour Beatty’s evidence in support of its extension of time claim was sadly lacking (and the court later agreed). As a result, the adjudicator carried out his own critical path programme analysis, ascertained the extension of time due and ordered Lambeth to repay a proportion of liquidated damages that had been withheld.
At this juncture the adjudicator could well have been forgiven for expecting to receive a pat on the back for all his hard endeavour in untangling a complicated dispute and doing so within a painfully short timeframe. Unfortunately, Lambeth didn’t see it like that and the adjudicator found his actions being scrutinised in court where he faced an allegation that he had breached of the rules of natural justice.

The judge found that the adjudicator had exceeded his jurisdiction by making Balfour Beatty’s case for it and had breached the rules of natural justice by failing to give the parties a chance to comment on his critical path analysis. Instead of a pat on the back the adjudicator was caught square between the eyes by water cannon and knocked firmly onto his foam rubber backside. What fun!

In recent years the sport of tripping up the adjudicator has continued. Along came ABB Limited v BAM Nuttall Limited [2013] EWHC 1983 (TCC). In an earlier adjudication the adjudicator had found in favour of BAM but in so doing made reference to a clause in the subcontract agreement that neither party to the adjudication had mentioned or relied upon. ABB’s response was something along the lines of “we can’t have him coming to that decision – he must be stopped.” Accordingly, ABB reached for the custard pies, propelled them forcefully in the adjudicator’s direction and off they all trotted to the high court.
You might be curious to know whether the adjudicator’s decision was right or wrong? Well, nobody seemed particularly bothered. The matter that appeared to get everyone excited was whether the rules of natural justice had been breached.

Now, I understand that these things are important, but let’s try to look at it from the adjudicator’s perspective. He had been asked to adjudicate on a dispute between Contractor and Subcontractor and had been provided with a copy of the subcontract terms and conditions to help him do so. Having reached his decision, the adjudicator made the schoolboy error of mentioning clause 11.1A (it was one of the clauses in the subcontract). “Ah!!!…..” said ABB, “….. we never mentioned clause 11.1A”. The judge agreed and found the adjudicator’s decision to be invalid and unenforceable – adjudicator forcefully catapulted backwards by giant elasticated rope!

The more recent case of Stellite Construction v Vascroft Contractors [2016] EWHC 792 (TCC) concerned an earlier adjudication where the adjudicator had decided that time had been set at large – Stellite (the Employer) said “this is not what Vascroft (the Contractor) had argued – you’ve exceeded your jurisdiction”. However, on this occasion the judge disagreed, “don’t be so daft – it’s one of the obvious outcomes” – giant foam rubber football successfully dodged!

The Adjudicator had gone on to decide what might be a reasonable date for completion. You might think that was a sensible and logical next step. But no! Stellite engaged the water cannon this time. “That’s not the question we asked you – you’ve exceeded your jurisdiction again” – this time the judge agreed.

Yes, we all understand the difference between liquidated and unliquidated damages and with the benefit of hindsight and a period of quiet reflection we can see that the adjudicator was asked about the former and not the latter. Nevertheless, the adjudicator must be thinking to himself “do you want me to decide your damn dispute or not?” Clearly, he didn’t notice the second giant football that struck him a nasty blow on the back of the head.

In Beumer v Vinci [2016] EWHC 2283 (TCC) there were two adjudications, the first (referred to as ‘BVII’) between Vinci (the Main Contractor) and Beumer (Vinci’s subcontractor) and the second (‘BLII’) between Beumer and Daifuku Logan Ltd (Logan) who was Beumer’s sub-subcontractor. In both instances these were ‘second adjudications’ between the respective parties (hence the references ‘BVII’ and ‘BLII’).

The same adjudicator decided both BVII and BLII on or around the same dates. However, this fact was not communicated to Vinci and was one of Vinci’s complaints in resisting enforcement of the adjudicator’s decision. The judge agreed with Vinci and considered the non-disclosure to be a breach of natural justice.

From reading reports of the case, the adjudicator’s motive for not disclosing to Vinci his involvement in BLII is not clear. However, there is more than a possibility that his motives were well intentioned and logical (how about the importance of observing the normal protocol of confidentiality in adjudication for instance?).
Suffice to say the judge was keen to point out that there should be no criticism of the adjudicator’s overall approach. Indeed, the judge considered that “….. [the adjudicator] considered both parties’ submissions with evident care and produced a detailed and thoroughly reasoned decision.”

Nevertheless, despite the “evident care” taken by the adjudicator, his decision was not enforced. The phrase used in this case was ‘apparent bias’ – the adjudicator didn’t exhibit actual bias at all; the mere possibility that there could have been bias was sufficient to send the adjudicator and his foam rubber giant rabbit outfit sprawling. Paice and Springhall v M J Harding Contractors [2015] EWHC 661 (TCC) and [2016] EWHC B22 (TCC) were two more cases relating respectively to the fourth and fifth adjudications between the parties on the same contract. The 2015 case concerned the enforcement of adjudication number 4 which had been decided in favour of Paice.

Harding resisted enforcement on the grounds that the adjudicator failed to mention that Paice had telephoned the adjudicator’s office on two occasions prior to adjudication number 3 and had spoken to the adjudicator’s office manager.

The judge decided that there was apparent bias and refused Paice’s application to enforce the adjudicator’s decision (the adjudicator appears to have reached the correct decision – but the ‘apparent bias’ thing scuppered it) – the soap suds and grease on the 6-inch-wide plank on which he was balancing were too much for the adjudicator on this occasion and into the water he went – head first.

The 2016 case was a repeat performance in many respects. Adjudication 5 had again been decided in favour of Paice (a different adjudicator this time) and Harding resisted enforcement on a number of grounds (more elasticated ropes, water cannons and giant footballs than you can shake a stick at). These included an allegation of ‘apparent bias’.
The issue here was that the adjudicator in adjudication number 5 had not disclosed a character reference he had provided some time earlier for the adjudicator in adjudication number 4. The defendant’s solicitor saw the opportunity and pounced. “Never mind whether the decision is right or wrong, we can argue ‘apparent bias’.”

The judge was having none of it this time. “This reference wouldn’t affect the exercise the adjudicator was required to carry out – and in any event you knew about it and didn’t raise any objection until very late in the adjudication” – so, in spite of the soap suds and grease on the 6-inch-wide plank on which the second adjudicator was balancing, a praise-worthy vertical orientation was maintained.

I admit that I have perhaps put something of a spin on the above cases, but I have done so in order to illustrate just how difficult an adjudicator’s task can be. No doubt I could justifiably be accused of exhibiting ‘apparent bias’ (if not ‘actual bias’), but the message to adjudicators is to beware and to take care!

Meanwhile, I’m off to the water cannon firing range to polish up my skills at knocking over the fella in the giant kangaroo outfit.

 

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