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30 July 2015 | Comment | Article by Iwan Jenkins

Adjudicator Bias? Paice v Harding: Part 1


In one of the more interesting cases this year (concerning adjudication, so all things relative!), Paice v Harding (t/a MJ Harding Contractors) [2015] EWHC 661 (TCC) dealt with several important and topical issues, one being that of adjudicator bias.

The case will certainly be of interest to adjudicators – Coulson J concluded that a fair-minded observer would consider that there was a real possibility that the adjudicator, Mr Sliwinski, was biased as a result of his failure to disclose conversations with one of the parties.

Background

Mr Paice and Ms Springall (the employer) had engaged MJ Harding (the contractor) to construct and fit out two residential houses in Surrey. The works subsequently came to a halt and the parties found themselves in dispute. The parties commenced two consecutive adjudications and Mr Sliwinski was appointed in each.

Following two adjudications, the contractor then sent its final account to the employer, which prompted a number of calls from the employer to the adjudicator’s office (speaking with the office manager and not the adjudicator). A month later, the contractor commenced a third adjudication. This time, a different adjudicator was appointed, who found in favour of the contractor.

Another month on and the employer commenced a fourth adjudication. Mr Sliwinski was once again appointed. The contractor wrote to the adjudicator and the employer, asking for details of any oral communications between them and copies of landline telephone records (no record was made at the time of the calls and recollections of what was discussed differed, although it appears they were mainly concerning procedure and not regarding the merits of the case).

Records were not provided and the adjudicator denied any contact with the employer, “save in relation to the previous adjudications”. The adjudicator found in favour of the employer. The contractor refused to pay and so the employer brought enforcement proceedings.

Held

Coulson J declined to enforce the decision, on the basis that a fair-minded observer would consider there was a real possibility that the adjudicator was biased. In doing so, he held that a long telephone call, “should not have been permitted to take place at all, particularly given that Mr Sliwinski had already acted as adjudicator in two separate adjudications”.

The judge also dismissed the employer’s claim that the contractor had waived its right, at the start of the fourth adjudication, to raise bias (it would appear that the contractor had some knowledge of the phone calls to the adjudicator’s office and when the adjudicator denied any contact between himself and the referring parties, the contractor knew it would have grounds for resisting enforcement). He held that the contractor did not know the content of the phone calls and so it did not know that the grounds for a natural justice challenge had arisen.

Comment

Despite the judge labouring the point that the adjudicator should have been more forthcoming about the phone calls when asked about it, there is an inference from his comment that a conversation alone (regardless of its nature or content) could amount to a finding of apparent bias. This should set alarm bells ringing and all parties involved in adjudication ought to sit up and take note.

Given the time that had elapsed between the phone calls and the commencement of the fourth adjudication (two months), the fact that conversations had been with the office manager and not the adjudicator himself and that they apparently concerned procedure, this judgement may seem a little harsh on the adjudicator (and, therefore, the employer). The judge clearly thought a fair-minded and informed observer would believe that a bias had arisen and, of course, adjudicators should be scrupulous and impartial. They are not, however, TCC judges and holding them to such high standards, given the ‘rough and ready’ nature of the adjudication process, may potentially lead to some seemingly unjust outcomes.

On the point of waiver, if one party has knowledge of communications between the adjudicator and one of the other parties, this case seems to suggest that it is sufficient to wait for the outcome of the adjudication and then raise a natural justice challenge if you lose. Surely, such an approach constitutes waiver? Being a slightly unusual set of circumstances, the point may not be further tested in the courts for some time.

Author bio

Iwan advises on non-contentious construction matters and has prepared and negotiated documentation on a wide variety of projects. He has advised on building contracts, appointments, development agreements, construction security documentation and all associated documentation.

Iwan has advised public sector clients in social housing, education, local and national government as well as contractors, consultants, sub-contractors, developers and funders in the private sector.

Iwan has a particular interest and expertise in framework agreements and collaborative construction contracts.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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