If adjudicators allow evidential ambushes the courts are likely to
overrule their decision as it represents a breach of natural justice. Four
recent cases highlight this fact, writes Daniel Atkinson.
WHEN adjudication was introduced, many thought that the adjudicator's
role was to find the 'right' answer - to find out what happened and then
apply the contract terms.
The adjudicator was required to use any evidence at hand and make his own
enquiries, if necessary, in this fact-finding role.
That view persists today and affects the way some parties carry out their
case.
It is most marked when a party submits evidence well into the
adjudication process.
This is the so-called 'evidential ambush' and relies on the view that the
adjudicator must consider all evidence submitted to him.
The approach can put the other party at a disadvantage unless it has time
to consider the evidence and has a chance to respond.
It has become clear that finding out what happened - the reconstruction
of past events - is subordinate to the main purpose of adjudication, which
is the administration of justice.
The adjudication process is not intended primarily to obtain the best
available approximation to past events, although that is desirable.
The primary purpose of adjudication is to administer justice between the
parties.
It is for this reason that the conduct of the parties, and particularly
the 'evidential ambush', may prevent the court enforcing an adjudicator's
decision.
The overriding rule of evidence in adjudication is that an adjudicator
must exclude any evidence if to do otherwise would lead to substantial
injustice.
The courts have repeatedly declined to enforce an adjudicator's decision
based on evidence on which the losing party has not had the opportunity to
make submissions.
Four recent decisions demonstrate this fact.
In the first case, London & Amsterdam Properties v Waterman
Partnership (December 2003) before Judge Wilcox, LAP had referred a dispute
to the adjudicator.
Waterman made its response and LAP was allowed to make a reply.
But when LAP served its reply, it included a supplementary statement by a
witness that contained significant new evidence.That evidence was available
at the time of the referral but had not been made available to Waterman
until much later.
In order to deal with the new evidence and consult its advisors, Waterman
requested an extension of time (statutory adjudication follows a strict
28-day timetable, which can only be extended by agreement between the
parties).
LAP, however, insisted on a strict adherence to the existing timetable.
Judge Wilcox found that LAP's conduct amounted to an evidential ambush.
And, although an ambush does not necessarily amount to procedural
unfairness, the judge in this case decided that it was sufficient reason for
him to refuse summary judgment.
Judge Wilcox declared that the adjudicator should have either excluded
the supplementary witness statement or should have given Waterman a
reasonable opportunity to deal with it.
In fact the adjudicator avoided a decision as to whether or not the
evidence should be admitted and then based his decision upon the additional
evidence without giving Waterman a proper opportunity to respond.
Judge Wilcox said that this amounted to a substantial and relevant breach
of natural justice.
The second case is AWG Construction Services v Rockingham Motor Speedway
(April 2004), heard before Judge Toulmin.
The project was the construction of two race tracks for cars. There were
problems with the track when there was seepage of water through to the
surface.
In referring the dispute to the adjudicator, Rockingham alleged a failure
by AWG to exercise due care and skill in the design of the layer below the
track; AWG responded to this allegation.
But then, in its reply, Rockingham abandoned its previous position and
for the first time stated that the problem was not caused by the layer as
such but by the absence of drainage to the layer.
The remaining time available for the adjudication did not give AWG
opportunity to consider the new material or to discuss it with the experts
and make a considered response.
When the adjudicator made his findings he took into account those very
matters which Rockingham had raised late in the proceedings. Judge Toulmin
commented that Rockingham had shifted its position so substantially that, in
effect, it gave rise to an entirely new case. AWG was unfairly disadvantaged
by its inability to respond properly.
Accordingly the judge set aside the adjudicator's decision because the
adjudicator had failed to comply with the rules of natural justice.
In the third case, Costain v Strathclyde Builders (December 2003), in the
Scottish Court of Session, Lord Drummond Young made the point that the
overriding rule of evidence also applies to evidence that is brought into
the adjudication proceedings by the adjudicator.
Adjudicators are chosen because of their knowledge of the construction
industry and construction law.
If that knowledge is applied only to assess the submissions by the
parties there will be no need for further comment from the parties.
But Lord Drummond Young said that, if the adjudicator uses his own
knowledge and experience to advance and apply propositions of fact or law
that have not been canvassed by the parties, he should make those
propositions known and call for comments.
The fourth case is Buxton Building Contractors v Governors of Durand
Primary School (March 2004).
Here, Judge Thornton held that it was for the adjudicator to fully
identify all the issues to be decided and then to decide them - particularly
where one of the parties was not legally represented.
In this case the adjudicator had not considered or decided upon the
contents of the submissions, documents and issues referred by the governors
of the school and, by excluding evidence, had not properly decided the
issues.
That was unfair and made the decision unenforceable.
So to sum up, adjudicators are not simply fact-finders. They are required
to administer justice as best they can.
And they must intervene by excluding evidence if to do otherwise may
cause substantial injustice - something that parties should understand when
preparing their cases.
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