Judgments Based On Adjudicators' Mistakes And Unjust Enrichments

A solicitor sitting in his office one day receives a telephone call from a client who is a contractor. The client states that he has successfully adjudicated a substantial matter. The adjudicator has decided in his favour. He now wishes to enforce the adjudication decision through the courts.

The adjudicator has made a huge mistake in his decision. The result is that the employer is ordered to pay 500,000 for work which was never carried out. The solicitor's contractor client acknowledges and accepts the mistake. He is, however, anxious to get to court as quickly as possible to enrich himself by half a million pounds for work which he never carried out.

The solicitor considers his position. On the face of it, what his client wishes to do appears unethical. It appears to be a misuse of the process of the court to seek judgment for a huge sum of money for work which was never carried out. In legal language the contractor has failed to give contractual consideration for the money payable under the adjudicator's decision. The contractor will be enriched by a mistake within the contractual process of adjudication. That seems to be unjust enrichment.

Any cross-claim made by the employer for unjust enrichment may be defeated on the grounds that public policy requires the enforcement of the adjudicator's decision. Nevertheless both parties to the court proceedings and the judge will know that the decision is mistaken and if the decision is enforced, an unfair enrichment of the contractor will have occurred.

A quick review of the recent case law reassures the solicitor that he can get his unscrupulous client judgment for half a million pounds even if his client admits that the adjudicator made a mistake and with the full knowledge of the judge who gives judgment that he is enforcing an adjudication process in which there is a fundamental mistake.

The judge at first instance will simply follow the Court of Appeal's decision in the case of Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd.

The present state of the law under which judgment is given for payment of money arising out of known mistakes in adjudicators' decisions is shameful.

Not all of those who want to see an immediate reform of the law to correct this are enemies of adjudication. Some people who groaned inwardly at the court's emasculation of the set off and adjudication provisions in DOM/1 in cases such as Cameron v Mowlem and Acsim (Southern) v Dancon, again groan inwardly as the courts make a...