Bal (1996) Ltd v Taylor Woodrow Construction Ltd

The adjudicator' decision in the sub-contractor's favour was in breach of the rules of natural justice by reason of his having come to a conclusion on a material question of law with the benefit of outside legal advice without disclosing that advice or his instructions to the lawyers

Technology and Construction Court
His Honour Judge David Wilcox QC
23 January 2004
A dispute arose as to the amount to the value of the work carried out by the sub-contractor. The adjudicator decided to determine his own procedure by seeking legal advice as to the effect of the provision in the sub-contractor's letter of intent purporting to limit the sum recoverable by the sub-contractor under the letter. The sub-contractor indicated its consent to the adjudicator obtaining such advice and the contractor did not object to the adjudicator obtaining such advice. The adjudicator did not inform the parties when the meetings with the outside lawyers were to take place, what material he intended to place before them or whether the advice was to be in writing. The adjudicator had his meetings with his outside lawyers and in his decision made an award in the sub-contractor's favour. The contractor contended that the adjudicator had reached his decision in breach of the rules of natural justice.
Judge Wilcox held that the adjudicator had been in breach of the rules of natural justice on the basis that there was no relevant acquiescence by the contractor by omission or conduct that led to the conclusion that the procedure followed by the adjudicator was fair (despite the fact that the contractor did not object to the adjudicator obtaining such advice) and that any such acquiescence would have had to have been clear, informed and unambiguous. In short a fair minded and informed observer would have concluded that there was a real possibility of unfairness. It was important that confidence in the adjudication system should be maintained both in general and in relation to the decisions in individual cases with the result that it was important that adjudicators should clearly be seen to give parties a fair opportunity to present their arguments and deal with the material matters upon which the adjudicator might be basing his decision.
Advice Note
Even if a party does not indicate that it wishes to have sight of outside legal advice obtained by an adjudicator, an adjudicator will still be in breach of the rules of natural justice unless that party positively indicates that it does not wish to see the advice.