In our previous article in this series, we looked at the Response and further submissions made by the parties in the adjudication.
In this article we focus on the adjudicator’s control of the process leading to a decision.
Powers
What powers does the adjudicator have to control procedure in the adjudication?
By section 108 of the Construction Act 1996 a construction contract must contain procedures allowing the adjudicator to reach a decision within 28 days of the referral or such extended period as may be agreed. (There are two alternative ways of extending this period by agreement).
There should also be provisions which:
- ‘Impose a duty on the adjudicator to act impartially’ and
- ‘Enable to the adjudicator to take the initiative in ascertaining the facts of the law’.
If the contract contains these requirements the parties may agree to adopt more detailed procedures for the conduct of the adjudication. Under these, the adjudicator may, for example:
- Direct the timetable for the adjudication, with deadlines or limits on written documents or oral representations.
- Request production of relevant documents, including written statements to support the referral notice or response;
- Convene meetings to question any of the parties;
- Conduct site visits;
- Obtain and consider representations submissions as required – this can include holding brief hearings where oral submissions will be made;
There is also a general duty on the part of the adjudicator to ‘avoid incurring unnecessary expense’.
“Taking the initiative” to ascertain facts and the law suggests an inquisitorial approach. Whilst it is up the adjudicator to find the relevant facts to determine the dispute, stringent time limits imposed upon adjudicators (and the parties) make the adjudicator reliant upon the information provided with the party’s submissions. It can be unwise to stray from that information, or to rely on instinct or intuition or the adjudicator’s own technical judgment. A decision made in that way can be challenged on the basis that it has not been based on material submitted by the parties, and might be seen as a sign of bias, or an excess of jurisdiction.
Directions
Directions will normally be issued after the referral. The adjudicator will then be aware of the amount of material likely to be involved. It will give the adjudicator an opportunity to request the referring party’s agreement to extend the 28 day period for the decision, as the Act allows, by 14 days. It will help the adjudicator to decide on the period to allow for the response to be served. Fresh directions will be needed to serve a reply or any further submissions, and if allowed these must be limited, balancing time constraints with fairness. Directions can provide a closing date for submissions, after which no further evidence will be considered without a full explanation and the agreement of both parties to a limited extension to the date for delivery of the decision (the second of the two ways of extending this period by agreement).
Fairness and Natural Justice
The Construction Act clearly states that adjudicators must act impartially. Case law also confirms that adjudicators must comply with the rules of natural justice1. The view of the courts is that with no appeal against findings of fact or law by the adjudicator, adherence to natural justice rules in adjudication is possibly more importance than in other tribunals having more developed jurisdictions. However, for a failure to observe natural justice rules to result in a successful challenge, the lapse must have had a decisive effect on the decision and not be merely peripheral to it or irrelevant.
Natural justice rules should be reflected in the adjudicator’s procedural decisions as well as in the decision itself. Both parties must be given a fair opportunity to make their respective submissions. Ideally, adjudicators should demonstrate that submissions have been understood and taken into account. As indicated, this can discourage adjudicators from applying their own research.
Fairness is the main reason why further documents are allowed to be submitted and commented on by the other party, subject of course to limitations set by the adjudicator. For the same reason all correspondence in the adjudication must be copied to all of the parties and to the adjudicator. Adjudicators must avoid phone conversations with one of the parties unless in the presence of the other.
Issues of natural justice can involve conflict of interest. Any suspicion of a connection between the adjudicator to one or other of the parties (or to the dispute itself) could lead to a decision being challenged on grounds of potential bias. To avoid this, real or substantive connections should be drawn to both party’s attention as soon as the adjudicator becomes aware of them.
Evidence, Statements and Documents
Even though adjudication is a summary procedure based predominantly on written submissions, the referring party is still required to prove its case on the balance of probabilities. For example, claims for delays or for loss and expense require proof both as to the cause of the delays sustained and the amount of their financial consequences.
Evidence such as the contract and interparty correspondence will be common to both sides, and it will normally be sufficient for this to be exhibited to the referral. Any relevant missing items would then be supplied with the response. Where discussions at un-minuted meetings are relied upon by either of the parties, the party with that evidence may wish to include a brief witness statement about the discussion with its submission.
Larger adjudications often depend upon expert evidence, and it is normal in those cases for expert reports to be served with the main submissions. Delay claims often depend upon expert planning evidence exhibited in this way. A party intending to rely upon an expert’s report may want to ensure that the report or the gist of the report has already been made available to the other party. If the referring party introduces and expert’s report in its referral notice without prior disclosure, it is vulnerable to the argument that it raises a new dispute which has not crystallised before the notice of adjudication.
Meetings
Meetings have been rare in small to medium sized adjudications, although the increasing ease of using video conferencing has led to adjudicators more often scheduling meetings to agree the timetable from the outset of the case.
After the response is served, a meeting provides an opportunity for the adjudicator to question the parties and their experts in order to clarify questions which have arisen, in particular technical questions. Before any such meeting takes place, the adjudicator will provide an agenda of the points which he wishes to clarify.
Site Visit
By contrast, a site visit by adjudicators, particularly where the project is ongoing, is both common and desirable. Where disputes concern the nature of defects, or physical conditions or constraints of a site, a visit may be extremely helpful to the adjudicator’s overall understanding of those issues.
Plenty of notice should be given of a site visit – ideally as soon as the adjudicator has reviewed the referral. Importantly, a representative of each party should accompany the adjudicator during the visit. If there are specific aspects which the adjudicator intends to ask questions about, these should be identified in advance.
Site visits should also be treated as part of a ‘formal’ process. The adjudicator should avoid trying to ‘mediate’ the dispute or use the visit as means of exploring common ground between the parties. The adjudicator should never hold a conversation with one representative in the absence of the other.
Some disputes turn upon the quality of the materials which may have been used in the specification or construction of the part of the works. Factual questions about the materials used often require the carrying out of tests to determine the exact nature of what has been used, and the adjudicator is empowered to authorise others to carry out tests or experiments provided the expense of doing so does not go beyond what is considered ‘necessary’.
Hearings
Although adjudications are generally a ‘documents only’ process, the adjudicator can consider that given the scale of the dispute, some of the issues are such that a (very limited) oral hearing would be beneficial.
The giving of oral evidence in adjudications is rare, but in cases where accounts of the facts and the documents contradict each other the adjudicator may have little choice but to hear the evidence orally in order to decide which account is the most credible. Equally, if the adjudicator is confronted by two well-argued and researched expert’s reports, a short oral hearing may be needed to determine which of the experts is the most persuasive.
This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email enquiries@sharpepritchard.co.uk
1 See Discain Project Services Limited v Opecprime Developments Limited [2001] BLR 285 TCC
