July 5, 2018
A recent case gave a warning for adjudicators to ensure they consider all the party’s submissions and the issues raised. In the case of DC Community Partnerships Limited v. Renfrewshire Council (2017)1, the adjudicator failed to address the responding party’s defense and was held to have failed to exhaust his jurisdiction.2 This article will consider how adjudicators should address the issues in the dispute and the consequences if they are not addressed.
FINDINGS OF FACT: PROCEDURE
The adjudicator needs to identify the issues on which he is deciding. Once all the issues are identified the adjudicator should then proceed to the findings of facts on each issue. The adjudicator is given a “fairly free hand”3 in the procedure to determine the facts, but must understand which issues require determination. This is usually defined in a notice of intention to refer to adjudication — which is “the most important document in any adjudication, because it defines the dispute,”4— and the subsequent Responding party’s submissions in response.
The adjudication only commences if there is a valid “construction contract”5 which meets the statutory definition for “construction operations”6. Whether or not the contracts are in writing does not apply to contracts entered into after 1 October 2011 in England and Wales and is no longer a finding of fact.
The adjudicator may decide that a meeting, an inspection, an expert witness, witnesses of fact and submission of further documents or evidence may assist him in undertaking the “initiative in ascertaining the facts and law,”7 to make a decision. All of this must be done with each party having an equal opportunity to present their case. The adjudicator needs to take care to ensure that he communicates his intention8 before undertaking any further investigations, as he could be acting outside of his jurisdiction — as seen in Balfour Beatty v. London Borough of Lambeth (2002).9 The adjudicator is to use such processes to assist him in findings of fact and must act fairly for each party. This could mean that where new documents are produced late in the process the adjudicator has to consider whether to accept such late submissions.
The adjudicator should then assess the facts raised and find any differences in the statements of fact. The adjudicator should also assess whether there is evidence to support a referring party’s claim. The factual issues raised for adjudication need to be substantiated by evidence of fact and any opinion needs to be supported by expert evidence or legal issues supported by precedent. It is critical to the process that the referral is factually correct as the adjudicator’s jurisdiction comes from deciding the issues set out in the notice of adjudication, and the adjudicator must not stray from deciding the issues contained therein.10
The adjudicator should then address the issues to be considered within his decision and compare the issues that are admitted and disputed, as well as whether the other party agrees or concedes to the disputed issues. This will then provide the basis for the issues that the adjudicator must examine and consider whether there is evidence to support each of the party’s claims. The findings of fact are then presented to the adjudicator who would need to analyze the evidence. The process of analyzing evidence is not under strict rules as per litigation; however, an appropriate and formal approach should be applied.
The adjudicator needs to take care not to broaden the scope of the referral and not decide on any issues outside of the scope of the referral. Nevertheless, if the adjudicator wishes to raise issues not raised by the parties, they must seek agreement from the parties before a decision is made, in order to give them the opportunity to comment.11
The adjudicator has a duty to use the documents to determine the facts for the issues and make the decision. However, adjudication is a rapid procedure and it is recommended that the adjudicator does not reach a decision based upon procedural law, unless it is necessary, and remains confined to the facts of the dispute.
WHAT HAPPENS IF AN ADJUDICATOR DOESN’T IDENTIFY ALL ISSUES?
The adjudicator has a duty to consider all of the issues referred and must restrict his decision to those issues. The adjudicator does not have the jurisdiction to dismiss any issues, as seen in Ballast Plc v. The Burrell Company (2001)12, where the adjudicator misconstrued his powers and failed to decide on all of the issues referred. If the adjudicator examines issues which were not referred to adjudication, then there is a risk that the Court could rule the decision as a nullity as he has exceeded his jurisdiction.13
The parties may challenge whether the adjudicator has examined all of the issues to the dispute. This was highlighted in Britcon v. Lincolnfields (2001),14 where the defendant claimed that the adjudicator’s decision was unenforceable as he had not decided on all material submitted, in particular that an oral agreement was made between the parties regarding payment provisions. The judge concluded that the adjudicator had fairly decided all issues referred within the notice of adjudication and the subsequent referral. As such the adjudicator should only address the issues raised by the parties and address only these within the decision.15
The adjudicator not following the procedure in the notice of adjudication would not make the interim award unenforceable providing the right question was addressed. This was explored in Jerome v. Lloyd Morris (2002),16 where a judge dismissed an argument that a notice of intention to adjudication did not specify that relief was sought, therefore that no interim payment or award was due. The adjudicator has jurisdiction to decide on the issues and even if an adjudicator’s decision is wrong, it does not necessary mean it is invalid,17 unless the adjudicator has acted outside of his jurisdiction.18 If an adjudicator has made a mistake but answered the question19 then he has acted within his jurisdiction and the mistake should be corrected by finally binding resolution in arbitration or litigation.20 However the slip rule21 of the 2009 Act,22 allows the adjudicator to “correct his decision so as to remove a clerical or typographical error arising by accident or omission.”23 Even where an adjudicator has explored other issues outside of the scope, unless he has breached natural justice, and there was prejudice to a party, then it is unlikely to be overturned by the court.24
The courts could overturn an adjudicator’s decision if the adjudicator does not deal with all of the referred matters.25 The adjudicator has a duty to deal expressly with all the issues in the dispute. Even a ‘catch-all’ statement to the effect that all matters would be decided was deemed by the courts to be inadequate.26
In the adjudication process the parties are looking for a third party ruling on their disputes. If the adjudicator fails to undertake this then the procedure has failed. However, the burden is on the parties to ask the correct questions — and not challenge an adjudicator’s right answer to a wrong question.27
DC COMMUNITY PARTNERSHIPS LIMITED V. RENFREWSHIRE COUNCIL (2017) This case is a challenge of an adjudicator’s decision for the responding party to pay the referring party following the non-issue of a payless certificate under a project contracted under a NEC3 2005 Option C standard form.
- DC Community Partnerships Limited v. Renfrewshire Council  CSOH 143 Outer House, Court of Session.
- 2. Pilon Limited v. Breyer Group plc  EWHC 837 (TCC) per Coulson J at paragraph 22.
- Macob Civil Engineering Limited v. Morrison Construction Limited  BLR 93; 64 Con LR 1;  CILL 1470; per LJ Dyson.
- COULSON,P. Construction Adjudication, Oxford University Press, Oxford, 2007 P.407 16.02.
- Housing Grants, Construction and Regeneration Act 1996 S.105.
- The Scheme for Construction Contracts (England and Wales) Regulations 1998 SI 1998 No.649, Paragraph 13
- RSL (South West) Limited v. Stansell Limited  EWCA Civ 1319.
- Balfour Beatty Construction Limited v. The London Borough of Lambeth  EWHC 597 (TCC).
- Northern Developments (Cumbria) Limited v. J & J Nichol  EWHC Technology 176;  BLR 158.
- SGL Carbon Fibres Limited v. RBG Limited  CSOH 62.
- Ballast Plc. v. The Burrell Company (Construction Management) Limited  ScotCS 324;  BLR 529.
- Bickerton Construction Limited v. Temple Windows Limited (2001) TCC.
- Britcon (Scunthorpe) v. Lincolnfields Limited (2001) TCC.
- LPL Electrical Services Limited v. Kershaw Mechanical Services (2001) TCC.
- Jerome Engineering Limited v. Lloyd Morris Electrical Limited  CILL 1827.
- S.L. Timber Systems Limited v. Carillion Construction  ScotCS 167;  BLR 516. 18. Mecright v. T A Morris Developments Limited (2001) TCC.
- Partner Projects Limited v. Corinthian Nominees Limited  EWHC 2989 (TCC).
- Shimizu Europe Limited v. Automajor Limited  EWHC 1571 (TCC);  BLR 113. 21. Bloor Construction (UK) Limited v. Bowner & Kirkland (London) Limited  BLR 314;  CILL 1626.
- Local Democracy Economic Development and Construction Act 2009.
- Ibid, Section 140 (3a).
- Martin Girt v. Page Bentley  EWHC 2434 (QB).
- Mecright v. T A Morris Developments Limited (2001) TCC.
- Paul Broadwell (t/a Broadwell Construction) v. k3D Property Partnership Limited  Adj CS 04/21. 27. Shimizu Europe Limited v. Automajor Limited  EWHC 1571 (TCC);  BLR 113.