Whyte & Mackay Ltd v Blyth & Blyth Consulting Engineers Ltd

If the adjudicator's decision had not been unenforceable due to the adjudicator's breach of the rules of natural justice, its enforcement would have constituted a violation of the engineer's rights under article 1 of the First Protocol of the European Convention on Human Rights.



Scotland, Outer House, Court of Session
Lord Malcolm
9th April 2013

Article 1 of the First Protocol of the European Convention on Human Rights provides that every person is entitled to the peaceful enjoyment of his possessions and that no one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law.
The engineer designed works to the client’s factory which were affected by settlement after completion. The client alleged that the engineer failed to include piling in its design and began an adjudication six years after completion in which it successfully claimed damages for the cost of interim remedial works and the reinstatement of the main production floor slab in some 20 years time (the year before the end of its lease in 2036).
Lord Malcolm held that the decision’s enforcement would have constituted a violation of the engineer’s rights under article 1 because (i) Strasbourg case law indicated that the absence of compensation for losses caused by an interference in property rights will be an important factor to be weighed in the overall balance and (ii) To enforce this award in the very particular circumstances of the instant case would not be justifiable as a proportionate measure in pursuit of a legitimate aim or strike a fair balance between protection of the engineer’s fundamental rights and the protection of any public interest reasons for the interference.
Assuming that enforcement would amount to an interference with the engineer’s peaceful enjoyment of its possessions, it was not justified because (i) There was no pressing need for a speedy provisional decision (ii) The dispute arose long after completion of the contract (iii) The settlement problem did not and would not prevent the use of the premises for their intended purpose (iv) No major losses would be incurred for many years (v) In the meantime the client was considerably in pocket by not incurring the extra costs involved in the piling works (vi) If ultimately the engineer was successful, there was no guarantee that it would recoup any monies paid to the client or provision for state compensation for any such loss and (vii) None of the public interest justifications underpinning statutory adjudication applied unless they were given the most extended definition.