Can Adjudicators Get Involved?

Profession:Herbert Smith

One of the most obvious temptations for anyone practical and fair-minded who comes across a stubborn and deeply-entrenched dispute is to try to "sort it out". Secure in the knowledge that, personally, they would never be so unreasonable, and often sure of their expertise and insight, professionals can underestimate the difficulties. Certain professionals make a living "sorting out" inchoate or incipient discord anyway - quantity surveyors for instance. When they come across a fully-fledged dispute the instinct may be simply to approach it as a commercial problem.

This can be a dangerous way to proceed if you are a statutory adjudicator under the Housing Grants Construction and Regeneration Act 1996 ("the Construction Act"), as a recent case shows only too clearly. The risk is that the impartiality required of all adjudicators may be undermined or removed, which leads to the eventual decision being of no use to anyone. It may involve extra delay and expense for all parties and a not inconsiderable risk of being involved (as a witness) in subsequent litigation. In Glencot Development and Design Co. Limited v. Ben Barrett & Son Contractors Limited (Action HT-00-401) the result was High Court proceedings.

The facts were essentially simple. The parties had met (as planned) with the Adjudicator for an adjudication hearing at a hotel. Before the adjudication hearing began, the parties negotiated and (so they thought) reached substantial agreement on a figure. They told the adjudicator about their agreement. They then discovered that they had not agreed one further issue, which was whether a discount should be applied to the figure. They both asked the adjudicator to mediate between them. He yielded to the temptation to "sort it out" and agreed to mediate, adding that if negotiations broke down he would resume his role as adjudicator. He then presided over six hours of talks, which failed to bring about an agreed resolution of the dispute. He later attempted to resume the adjudication and purported to give a decision. Ben Barrett & Son resisted enforcement of that purported decision on the ground that, as a matter of law, the adjudicator could not after having acted as mediator in the interim I, act "impartially" as required by the contract in conformity with the Act (S. 108 (2) (e)). There was no criticism of the adjudicator personally - the Court found that he had done as he had been asked by the parties and acted with propriety and concern for...

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