HGCR Act 1996 - Appointment of Adjudicator

© Daniel Atkinson 2001 02 October 2001

SUMMARY

The contract may name an adjudicator or the parties may agree an adjudicator. In practice if the Adjudicator is not named, the “referring party” will apply to a nominating body for an adjudicator to be appointed.

The application must be accompanied by the Notice of Adjudication. This should set out :

      (a) the nature and a brief description of the dispute and the parties involved,

      (b) details of where and when the dispute has arisen,

      (c) the nature of redress sought, and

      (d) the names and addresses of the parties to the contract

The Notice of Adjudication is intended to provide the Nominating Body with sufficient information to select the appropriate adjudicator, and for the Adjudicator to decide whether there is a conflict of interest and whether he is competent and able to decide the matter referred to him.

1. Section 108(2)(b)

The Contract is required to provide a timetable with the objective of securing the appointment of the Adjudicator and the referral of the dispute to him within seven days of the notice of intention to refer (the "notice of adjudication" under the Scheme)— Section 108(2)(b).

2. The Scheme

The Scheme sets out detailed provisions for the appointment of the Adjudicator at paragraphs I.2 - II.11.

A.  Adjudicator named in the Contract

Paragraph II.2(1)(a) requires the referring party to request the person specified in the contract to act as adjudicator. Since this provision is stated to be "subject to any agreement between the parties" it is suggested that the parties may agree to refer the dispute to someone other than the adjudicator named in the contract. The parties in any event are always able to vary the terms of the contract by agreement.

Paragraph I.3 requires the request to be accompanied by a copy of the notice of adjudication. This is intended to allow the proposed adjudicator to decide whether he is able to act as adjudicator.

Paragraph I.2(2) requires the person requested to act as adjudicator to indicate within two days of receiving the request whether or not he is willing to act.

Paragraph I.7(1) requires the "referring party" to refer the dispute in writing to the adjudicator, the "referral notice", not later than seven days from the date of the "notice of adjudication". Paragraph I.7(2) requires the "referral notice" to be accompanied by copies of, or relevant extracts from, the construction contract and such other documents as the "referring party" intends to rely upon. The "referral notice" is therefore accompanied by the main submission of the case of the "referring party".

Paragraph I.7(3) requires the "referring party" to send copies to every other party to the dispute, of the documents referred to in paragraphs 7(1),(2) at the same time as he sends them to the adjudicator.

The above provisions therefore are detailed procedures for complying with the seven day requirement of Section 108(2)(b) of the Act, for Adjudicator’s specified in the contract.

B. Conflicts of Interest

Paragraph I.4 requires the person requested or selected to act as adjudicator to be a natural person acting in his personal capacity. This does not appear in the Act and prevents firms being employed to act as adjudicators.

Paragraph I.4 requires that no request is to be made to an employee of any of the parties to the dispute.

Paragraph I.4 also requires any person requested to declare any interest, financial or otherwise, in any matter relating to the dispute.

C. Failure to Appoint Named Adjudicator

Paragraph I.6(1) deals with the situation where the person named in the contract indicates that he is unable or unwilling to act, or fails to respond within two days of receiving the request. The "referring party" may

"(a) request another person (if any) specified in the contract to act as adjudicator, or

(b) request the nominating body (if any) referred to in the contract to select a person to act as adjudicator, or

(c) request any other adjudicator nominating body to select a person to act as adjudicator."

The request is required to be accompanied by a copy of the "notice of adjudication" (Paragraph I.3). Paragraph I.6(2) requires the person requested to indicate within two days of receiving the request, whether or not he is willing to act.

D. Selection by Nominating Body

Where the parties fail to agree the selection of an adjudicator, or where the adjudicator named in the contract has indicated he is unwilling or unable to act, or where no person is named in the contract, then the person is selected by the nominating body. This may be the nominating body named in the contract (Paragraph I.2(b)) or an "adjudicator nominating body" selected by the "referring party" (Paragraph I.2(c)). There appears to be no restriction on the body to be selected by the "referring party", other than Paragraph I.2(3) which defines "adjudicator nominating body" as

"...a body (not being a natural persona and not being a party to the dispute) which holds itself out publicly as a body which will select an adjudicator when requested to do so by a referring party".

Paragraph I.5(1) requires the nominating body or the adjudicator nominating body to communicate the selection of an adjudicator to the referring party within five days of receiving a request to do so.

If the nominating body or the adjudicator nominating body fails to so communicate then under paragraph 5(2) the referring party may:

"(a) agree with the other party to the dispute to request a specified person to act as adjudicator, or

(b) request any other adjudicator nominating body to select a person to act as adjudicator."

Under paragraph I.5(3) the person requested to act as adjudicator is required to indicate whether or not he is willing to act within two days of receiving the request.

E. Objection to Appointment

Paragraph I.10 provides that where any party to the dispute objects to the appointment of the adjudicator, then that objection shall not invalidate the adjudicator’s appointment nor any decision he may reach.

F. Multiple Disputes/Contracts

Paragraph 8(1) allows the adjudicator to adjudicate on more than one dispute under the same contract, if all the parties to the disputes consent. It is suggested that this is more restrictive than the Act itself, which does not restrict the right of a party to refer disputes to an adjudicator appointed to deal with another dispute under the contract.

Similarly Paragraph 8(2) allows the adjudicator to adjudicate at the same time on related disputes under different contracts, whether or not one or more of those parties is a party to those disputes. The consent of all the parties to those disputes is required however.

Sensibly, Paragraph I. 8(3) provides that all the parties to the disputes may agree to extend the period for the adjudicator making his decision in relation to all or any of these disputes.

Paragraph I.8(4) envisages that an adjudicator already appointed may cease to act, because the dispute is joined to other disputes in accordance with Paragraph I.8(1) or I.8(2). In that case the adjudicator is entitled to payment of reasonable fees and expenses incurred (Paragraph I.25).

G. Resignation of Adjudicator

Paragraph I.9(2) provides that the Adjudicator can resign at any time on giving notice in writing to the parties to the dispute. In that case the referring party may serve a fresh notice under I.1 and request an adjudicator to act as previously described. The new Adjudicator may request, and the parties shall supply insofar as is reasonably practicable, copies of all documents made available to the previous adjudicator.

Paragraph I.9(2) requires the adjudicator to resign where the dispute is the same or substantially the same as one decided in adjudication. In that case the adjudicator is entitled to reasonable fees and expenses incurred (Paragraph I.9(4)).

If the dispute varies significantly from the dispute referred to him in the "referral notice" and for that reason the adjudicator is not competent to decide it, then he may resign. In that case the adjudicator is entitled to reasonable fees and expenses incurred (Paragraph I.9(4)).

In William Naylor v Greenacres Curling Limited (June 2001) Crt of Session the Court would not intervene when an Adjudicator did not carry out his statutory duty to resign when a dispute referred to him was substantially the same as a dispute decided in a previous adjudication.

H. Revocation of Appointment

Paragraph I.11(1) provides for the parties to a dispute to agree to revoke the appointment of the Adjudicator at any time. The Adjudicator is then entitled to reasonable fees and expenses incurred.

The parties are not liable to pay the adjudicator’s fees and expenses where the revocation is due to the default or misconduct of the adjudicator.