The English Court of Appeal recently issued a decision on forum shopping in Adjudication, and allegations of Adjudicator bias and whether these should prevent enforcement of an Adjudicator's decision. The case is Lanes Group Plc v Galliford Try Infrastructure Ltd (t/a Galliford Try Rail), 21 December 2011.
The Facts
Lanes were a subcontractor to Galliford. Various disputes arose between them. Galliford applied to the ICE for appointment of an Adjudicator. Following appointment, Galliford did not then send the Referral to that Adjudicator as Galliford's solicitors had had a "robust clash" with him on a previous dispute. Instead, they served a new Notice of Adjudication and applied to the ICE for a new Adjudicator to be appointed. Galliford proceeded with the Adjudication with the new Adjudicator. Lanes initially refused to participate and did not submit their Response as requested.
The Adjudicator issued a document "Preliminary Views and Findings of Fact" setting out his provisional conclusions. He requested parties' comments in relation to this. Both parties responded to this document and the Adjudicator then issued his decision, awarding £1.3m to Galliford.
Legal Arguments
Lanes argued that the decision should not be enforced for two reasons:
- the only validly appointed Adjudicator was the first one, as a party can only refer a dispute once to Adjudication. If a submission is made and not followed through, that is the end of the matter.
- the Adjudicator was biased in that he had reached firm conclusions in his "Preliminary Views and Findings of Fact" before considering Lanes' submissions.
Decision
The Appeal Court disapproved of forum shopping by parties to get an Adjudicator they wanted. However, they considered that there were "formidable difficulties" with Lanes' approach. There were no authorities suggesting that a claimant loses its right to Adjudicate if an adjudication is not pursued after preliminary steps are taken. The contract, ICE Adjudication Procedure and Scheme all recognised a right to re-start Adjudication in a variety of circumstances. The Lanes approach would mean a party could lose its right to Adjudicate because, for example, a postal delay meant papers did not arrive on time. In these circumstances, the Court confirmed the validity of the second Adjudicator's appointment.
In relation to bias, the test to be applied is "whether the fair minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased". The fair minded observer is taken to know all relevant facts (and to have distinguished between what is relevant and what is irrelevant) and not be complacent, unduly sensitive or suspicious.
There was said to be nothing wrong with a decision-maker setting out provisional views at an early stage to allow parties to address any issues arising from these. What is not permissible is for a final decision to be reached before all relevant evidence and arguments are heard. The Adjudicator's "Preliminary Views" clearly stated that it represented preliminary views only. Applying the "fair minded observer" test, this was not considered to be a pre-determination of the issues in advance of hearing from both parties, and there was no apparent bias or apparent pre-determination of the issues.
The Adjudicator's award was enforced.
Comment
The Courts' default position remains that they will enforce Adjudicators' decisions and it tends to be an uphill struggle to convince them otherwise. To succeed in relation to bias will require clear factual evidence supporting the allegation, as well as a clear apprehension, on reasonable grounds, of potential bias. It is evident from this, and previous cases of alleged bias, that this is a particularly difficult argument to win.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
