Specialist Ceiling Services Northern Ltd v ZVI Construction (UK) Ltd

The adjudication was not unfair by reason of the adjudicator having refused to withdraw after having been informed in the notice of referral of a without prejudice offer and having been sent a copy of the contractor's solicitors' letter enclosing that offer
 
SPECIALIST CEILING SERVICES NORTHERN LTD 
V
ZVI CONSTRUCTION (UK) LTD

Technology and Construction Court
His Honour Judge Simon Grenfell
20 February 2004
 
The sub-contractor's notice of referral made reference to a without prejudice offer having been made by the contractor to settle the adjudication. In addition the sub-contractor's surveyor sent to the adjudicator a copy of the contractor's solicitors' letter enclosing the offer. The contractor requested the adjudicator to withdraw from the adjudication in view of these matters (albeit that the adjudicator was not shown a copy of the offer itself). The adjudicator made a decision in the sub-contractor's favour. The contractor contended in the court enforcement proceedings brought by the sub-contractor that the adjudication was unfair because of the adjudicator's refusal to withdraw.
 
Judge Grenfell held that it was not the case that the adjudicator should have withdrawn in these circumstances on the basis that there was no objective indication of bias or unfairness on the adjudicator's part in his conduct of the adjudication. The adjudicator's reaction to the challenge made by the contractor in the form of his letter to the contractor's solicitors was the best indication of his state of mind at the time. It showed that he was unfazed by the knowledge that there had been without prejudice negotiations since he not only expected them to occur but in his experience offers were often made on a purely commercial basis in an effort to avoid the need for an adjudication. He also made it clear in his letter that he was applying the correct objective test to the question of whether he should withdraw.
 
Looked at objectively any adjudicator knowing that a without prejudice offer had been made by the contractor would have started the adjudication from the standpoint that its contention that it was owed money by the sub-contractor might have been unrealistic. The adjudicator was entitled to make it clear that he was entirely uninfluenced by such documentation as he had seen and it could be inferred from this statement that he had in effect brushed aside that documentation and had properly ignored it when reaching his findings.
 
Advice Note
The mere fact that an adjudicator is made aware at the beginning of an adjudication that a settlement offer has been made does not mean that the he must withdraw.