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Adjudication ambush


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.