Adjudicators - Whose side are you on anyway?

 

Adjudicators are invariably presented with conflicting arguments from parties. It is an Adjudicator’s duty to consider the conflicting arguments and reach a decision on whose argument he prefers. But what happens if the Adjudicator thinks both parties have got it wrong and he has a better idea for deciding the dispute, what happens then?

Is it wrong for an Adjudicator to reach a decision using his own experience? The starting point to this question is it will depend on what the adjudication rules say.  Some rules expressly state that the Adjudicator is entitled to use his own experience in reaching his decision. But many commentators argue that even if there is no express provision in the adjudication rules, this power is an implied in any event. So what does all this actually mean?

The short answer is that an Adjudicator is entitled to use his own experience to decide the question in dispute based on the submissions put forward by the parties. But if the Adjudicator decides to “go off piste” and reach a decision based on a line of argument or reasoning that has not been advanced by either of the parties then this is where the fun starts. Let me explain why.

Adjudicators are obliged to comply with the rules of natural justice. These are:

a)      to act fairly, in good faith and without bias;

b)      to allow each party a fair opportunity to present its case, to hear its opponent’s case and be afforded an opportunity to comment upon it;

c)       not to hear evidence from one party behind the back of its opponent; and

d)       to have no interest, financial or other, in the outcome of the case

If an Adjudicator decides he knows better than the parties and reaches his decision based on an idea, theory, calculation, methodology or legal point not put to him or her by the parties then the Adjudicator will probably be in breach of a), b) and c) and possibly even d).

There are many reported judgements which emphasise this point, the latest of which is Hyder Consulting (UK) and Carillion Construction Ltd [2011]

Now let me be clear. All the reported cases on this issue confirm that there is absolutely nothing wrong with Adjudicators using their own experience to decide the parties’ dispute. Parties want an Adjudicator who has been around the block one or twice and knows what he’s talking about. But just as importantly, the parties also want a decision that will be enforced by the Courts.

So, if an Adjudicator decides to go beyond the piste markers set out by the parties, he would be very wise to let them know what he is thinking and to invite submissions on his ideas. The resulting decision will then be reached without there having been a breach of the rules of natural justice and the chances for enforcement will have greatly improved.

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