Decision making in Adjudication

There has been little useful guidance from the Courts on how an adjudicator should decide matters referred to him. The decision in Bouygues v Dahl-Jensen [2000] BLR 522 appears to suggest that an adjudicator has great latitude. Even if he has answered the right question in the wrong way, his decision will be binding.

Recent cases suggest, but do not decide, that the Courts are considering whether there are some adjudicator’s decisions that should not be enforced at all, irrespective of the conduct of the parties or the adjudicator. Judge Wilcox in London & Amsterdam Properties Limited v Waterman Partnership Limited [2003] warned that there may be limits to the types of cases that could be decided by the process of adjudication. Judge Wilcox has expressed a similar view in AWG Construction Services Ltd v Rockingham Motor Speedway Ltd [April 2004].

Judge Wilcox suggested that there may be disputes so complex and the advantages so weighted against the defendant that there is a conflict between the right to adjudication and the adjudicator’s duty to act impartially. He considered that this may be a conflict which was impossible to resolve. Importantly however, he emphasised that the basis of the jurisdiction of an adjudicator’s decision was contractual and that was the method chosen by the parties for initial dispute resolution.

The Housing Grants Construction Regeneration Act 1996 does not restrict adjudication to certain types of disputes. The experience of the construction industry of this new form of dispute resolution and its success calls for an expansion of the process. Rather than restrict its application the process should be modified to take into account the types of disputes that are being routinely referred up and down the country, by giving the adjudicator more power over the timetable albeit to a limited degree.

The Courts are reluctant to review the details of adjudicator’s decisions and the process of reasoning adopted. This does not mean that the final stage of the adjudication decision-making process should not be judicial in the sense of “established by or founded upon law or official or accepted rules” and “characterized by careful evaluation and judgment”.

A simple description of the process of judicial reasoning in construction cases is the answering of a question by reference to necessary facts. Each party will have competing propositions for the answer to the question, each supported by some facts.

The propositions will usually involve the reconstruction of past events that cannot be proved with absolute certainty. Each party will have a different version, explanation or hypothesis of the past events, each supported by allegations of facts. The alleged facts must be proved by evidence. The methods and mode of proof are many and varied.

Essentially judicial reasoning requires a decision on which hypothesis is more probable than the other. The judge must decide which facts are proved and whether or not the proven facts support the hypothesis. Even when the judge prefers the hypothesis of the Claimant, that is not enough to win the case if the threshold of proof has not been reached.

In the House of Lords Rhesa Shipping Co SA v Edmunds and Another (The Popi M) [1985] 2 All ER 712 Lord Brandon stated that a defendant had no obligation to suggest a hypothesis and even if they choose to do so, there was no obligation on them to prove the truth of their alternative case. In addition it was not always necessary to make a finding one way or the other. No judge liked to decide cases on the burden of proof if he could legitimately avoid it, but in some cases due to the unsatisfactory state of the evidence, deciding on the burden of proof was the only just course to take.

The judicial process is not intended primarily to obtain the best available approximation to past events. If that was the purpose, then all evidence would be admissible without restriction and judicial reasoning would simply involve giving weight to each item of evidence on a logical enquiry. Instead, the law of evidence prevents some evidence being admissible for a variety of reasons. The existence of the burden of proof and the law of evidence shows that the primary purpose of judicial enquiry is to administer justice between the parties. The approximation of past events is subordinate to that purpose. That explains why the conduct of the parties themselves may prevent evidence being admissible.

Adjudicators are required to adopt a judicial approach to deciding issues – that is clear from the decided cases, the Act and the Scheme.

There appears to be only one overriding rule of exclusion of evidence in adjudication. The Courts have repeatedly declined to enforce an adjudicator’s decision because it was based on evidence on which the losing party has not had the opportunity to make submissions.

The decision in London & Amsterdam above suggests that an adjudicator is entitled to exclude evidence in circumstances which would make the process unfair, when a party would not have the opportunity to make submissions. Judge Wilcox held in AWG Construction above that a useful pointer in assessing the fairness of late allegations or additional evidence in adjudication was whether such a late “amendment” would put the parties on an unequal footing or place or add an excessive burden to the respondent’s task of making a considered response.

I suggest that the adjudicator’s decision must be based on the evidence and argument presented. The decision is to be made is on the merits of the case as presented and not the best approximation of events.

The adjudicator must conduct the adjudication proceedings with the aim of securing sufficient information and understanding about the case to allow him to do substantial justice between the Parties by his decision.

The adjudicator must take into account the conduct of the parties in responding to his requests for evidence, and exclude evidence if the process or timetable does not allow a party the opportunity to make submissions on it.

The adjudicator must decide against the referring party and refuse the remedy sought, if the adjudicator fails to understand or be convinced of the case.