Challenging Adjudicators' Decisions On Natural Justice Grounds

The fact that an adjudicator makes an error in reaching his

decision does not usually render the decision unenforceable.

Orthodox thinking is that if an adjudicator gets it wrong, the

result can be changed in "final" proceedings. On the

other hand, the Construction Act requires adjudicators to act

"impartially", which means that they have to give

each party a fair hearing. But what happens if an adjudicator

makes an error which has the effect of denying

a party a fair hearing? The issue arose in the case of CJP

Builders, decided last Friday, where:

The referring party (a subcontractor) sought to adjudicate

an interim payment claim in the order of £100K.

The subcontract terms (in the DOM/2 form) required the

responding party to make any written submissions within 7

days of the date of the referral. However, the responding

party said that it needed more than 7 days to respond - it

wanted 17 days.

After some haggling over whether the responding party

should have an extension of time, the referring party said it

would agree to the responding party having until noon on date

X to respond.

The responding party served its responsive submissions at

around 5:30pm on date X, i.e. after the noon deadline.

The adjudicator disregarded the responding party's

submissions because they were served late. The adjudicator

said that if he had any discretion under the subcontract to

do so, he would have taken those submissions

into account. But he believed that the subcontract did not

give him the power to take into account submissions that were

served late.

The adjudicator therefore found, in the absence of any

"admissible" material from the responding party,

that the subcontractor was entitled to the £100K or so

that it claimed.

The TCC refused to enforce the

adjudicator's decision. The court said that the adjudicator

was wrong not to consider the responding party's

submissions, and that the subcontract did give

him the power to do so. By not considering those submissions,

the adjudicator had not given the responding party a fair

hearing, i.e. the rules of natural justice had been

infringed.

There could, however, be another way of looking at this

factual scenario. The adjudicator made an error of law in his

interpretation of the subcontract. The fact that an error of

law was made did not mean that the adjudicator's decision

was unenforceable, even if the effect of that error was to deny

one of the parties a fair hearing. This is the approach that

the Court of...