Questioning the adjudication procedure itself

THE MOST recent, and probably the most important, case examining the fairness of adjudication under the Construction Act is that of Austen Hall Building v Buckland Securities (2001).

In this case, Buckland Securities alleged that it had been denied a fair trial guaranteed under Article 6 of the European Convention on Human Rights and was objecting to the enforcement of an adjudicator's decision. This was an attack not on the personal conduct of the adjudicator, but on the very process of adjudication itself.

The contract was JCT Minor Works. Austen, a building contractor, had submitted its draft final account in March 2000. Buckland's contract administrator had made no final decision on the final account in the nine months before adjudication was commenced.

The adjudicator made his decision and Austen sought to enforce it.

Buckland argued that the Construction Act's requirement that the adjudicator should reach a decision within 28 days was manifestly unfair. The time limit can only be extended with the consent of the referring party - in this case, Austen. This also was unfair, said Buckland, since it allowed the referring party to ambush the other party by preparing a detailed case over an extended period of time and then requiring a detailed answer from the other party in a very limited period.

Buckland alleged that it had been denied a fair trial guaranteed under Article 6 of the European Convention on Human Rights, which is given effect in England and Wales by the Human Rights Act 1999. Article 6(1) of the Convention requires anyone whose civil rights are being determined to have a fair and public hearing and a public pronouncement of the judgement.

Buckland said that Section 108 of the Construction Act, which creates the right of adjudication, was inherently unfair and contrary to the Convention on Human Rights. Buckland alleged it had been denied a proper and equal opportunity to present its case and a reasonable time to respond.

But in the Technology and Construction Court, judge Peter Bowsher held that, even if the Convention does apply to an adjudicator's function, enforcement of his decision cannot be defeated solely on grounds of the timescale of the process - assuming the adjudicator has followed the timescale of the Construction Act.

Buckland also argued that it had not been given a public hearing and the adjudicator's decision had not been given publicly.

But Judge Bowsher held that adjudication was not a legal procedure and, although it could provide the basis for an application to the court for judgement, it was not in itself enforceable. An adjudicator exercising functions of the sort required by the Construction Act was not therefore acting as a public authority and the publicity requirements of the Convention did not apply.

Even if the adjudicator was a public authority for the purposes of the Human Rights Act the whole process - including court proceedings - necessary to enforce his decision had to be examined, not just his decision taken alone. On that basis there was the necessary public hearing before the decision is enforced (if enforcement was necessary) and all the other requirements of Article 6 were satisfied. Accordingly the lack of publicity in the adjudication process could not defeat enforcement of a decision.

In any event, Judge Bowsher found that Buckland did not ask for a public hearing. It asked not for the matters in dispute to be heard but for the adjudicator to adopt the role of conciliator or mediator in order to settle the dispute.

Buckland had thus waived its right to a public or private hearing by failing to request an opportunity for the parties to present their cases orally. It was not open to a party to adjudication who has not asked for publicity to wait until he has lost and then complain of the lack of publicity.

Judge Bowsher then turned to the issue of natural justice. There are two rules of natural justice:

impartiality and fairness. An adjudicator is expressly required by Section 108(2)(e) of the Construction Act to act impartially. He is also required by the rules of natural justice to consider relevant information submitted to him by any of the parties to the dispute and to make available to them any information to be taken into account in reaching his decision.

Judge Bowsher considered that in practice, adjudications are governed by rules of natural justice that are not very different to Article 6 of the Convention except for the requirement of a public hearing and public pronouncement of the decision. The time limits were also subject to the rules of natural justice but, because Parliament is supreme, there was no question of an Act of Parliament being attacked in the courts as being in breach of the rules of natural justice.

For all these reasons, Judge Bowsher held that the decision of the adjudicator should be enforced by summary judgement.

Key points

If an adjudicator follows the timescales of the Construction Act then a party cannot use the Human Rights Act to challenge the adjudicator's decision solely on the basis of those timescales.

An adjudicator is not a public authority for the purposes of the Human Rights Act, so the Act does not apply to adjudications.

If the Human Rights Act did apply, the whole process including the court hearing on enforcement meant there was no breach of the Convention.

The adjudicator has to conduct proceedings in accordance with the rules of natural justice.