In this edition:
- Failure to give parties a chance to comment dooms adjudicator's decision
- Court reiterates pay first , adjudicate later, Construction Act principle
- Co-insured under an 'all-risks' policy - but did that cover everything?
- Minister threatens action against construction product manufacturers over unsafe cladding
- Ban on ground rent charges in new residential leases starts on 30 June 2022
- Government agrees funding of building safety repairs with major developers
- Building Safety Act receives Royal Assent
1. Failure to give parties a chance to comment dooms adjudicator's decision
To assess critical delay on a construction project, it was first necessary to establish a baseline programme, a process complicated by the fact that one had not been agreed. The adjudicator selected as a baseline programme one which not only was not contended for by either expert, but which both experts had given reasons for rejecting, and he made an award to the pursuer based on a critical date that was two days earlier than the date proposed by the pursuer. Neither that date, nor the consequences of selecting it as the critical date, was canvassed with the parties. Was that a breach of the rules of natural justice?
Noting that the courts will in general summarily enforce decisions of adjudicators, but that where an adjudicator is found to have acted contrary to the interests of natural justice, enforcement will be refused, the Scottish court drew, from the English and Scottish case law, these propositions, whose common theme is that the adjudicator's procedure must be fair:
- each party must be given a fair opportunity to present its case;
- if the adjudicator makes their own investigations and inquiries, or proposes to use their own knowledge and experience to advance significant propositions of fact or law not canvassed by the parties, it will normally be appropriate to canvas them with the parties before making a decision;
- the adjudicator should not decide a point on a factual or legal basis that has not been argued or put forward before them;
- but an adjudicator can reach a decision on a point of importance on the material before them, on a basis for which neither party has contended, provided that the parties were aware of the relevant material and the issues to which it gave rise had been fairly canvassed;
- for a breach of natural justice to vitiate a decision, it must be material; a breach is likely to be material where the adjudicator has failed to bring to the parties' attention a point or issue on which they ought to have been given the opportunity to comment, if it is either decisive or of considerable potential importance to resolving the dispute;
- an adjudicator is afforded considerable leeway and is entitled to adopt an intermediate position not contended for by either party without giving notice of their intention to do so.
The court noted that the line between an adjudicator going off on a frolic of their own and making legitimate use of their experience to analyse material which has been lodged, and commented on by parties, before reaching a decision not contended for by either party, is not always an easy one to draw, particularly when it is remembered that an adjudication decision reached by an adjudicator who has embarked upon the latter exercise will be enforced by the courts, even if wrong.
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