UK: Adjudication: The Case Of Dorchester vs Vivid Raised The Familiar Question Of When An Adjudication Breaches Natural Justice. Here Is What The Judge Had To Say....Fair Enough?

Last Updated: 20 March 2009
Article by Timothy Elliott QC MA (OXON)

A feature of adjudication now sadly familiar to practitioners is the way in which some referring parties apparently try to hamper the respondent's ability to respond to the claim. With short time limits in play some will choose the most inconvenient time to launch an adjudication and serve vast quantities of documents - behaviour which sometimes resembles ambush by steamroller.

In Dorchester Hotel Limited v Vivid Interiors Limited (19.01.09) Mr Justice Coulson was faced with an adjudication in which he clearly felt this was going on. Vivid had been engaged by Dorchester to carry out refurbishment in its hotel. The final account was in dispute. On 19th December, the Friday before Christmas, Vivid commenced adjudication proceedings. The Referral Notice, itself ninety two pages long, was accompanied by thirty seven lever arch files which included six substantial witness statements and two experts' reports of thirty and twenty pages each. Whilst it appears that much of this extensive material was not entirely new at least five files were and many of the individual figures within the final account had been recast or revised.

The adjudicator was only prepared to accept the reference if Vivid agreed to disregard the holiday period from 24th December to 4th January for the purpose of the twenty eight days within which the adjudication had to be concluded. Vivid agreed and in addition agreed a further extension to 28 February with a timetable which required Dorchester to respond to the claim by 28th January. However beyond that Vivid was not prepared to go.

Dorchester said this timetable was too tight and claimed there was a very real risk of there being a breach of natural justice. Using Part 8 procedure under the Civil Procedure Rules it sought declarations to that effect. Mr Justice Coulson said this raised the novel question of the extent to which the court should intervene in an ongoing adjudication in connection with potential breaches of the rules of natural justice.

The judge clearly sympathised with Dorchester. He said that Vivid had commenced the adjudication in the way it had in order to obtain the greatest possible advantage from the summary adjudication procedure. He added that it was a matter of regret that the adjudication process, which was itself introduced as a method of dispute resolution which would avoid unnecessary legal disputes and procedural shenanigans, was now regularly exploited in the same way. He also expressed confidence that the enthusiasts for adjudication in and out of Parliament in 1996 had not envisaged that the system would be used for making a claim of this type and in these circumstances. Whilst he accepted that Vivid was faced with an employer who was stonewalling and that it had sought to ameliorate its conduct to some extent by agreeing a revised timetable, nevertheless his overall view was critical.

Despite this he did not grant Dorchester the declaration it sought. He rejected Vivid's argument that he did not have jurisdiction to grant the declarations, but he felt that he should not grant relief at this stage. Firstly he noted that the adjudicator himself had said that he could determine the dispute fairly within the time agreed to by Vivid. Secondly, although the timetable was tight, he could not say at this stage that it was incapable of giving rise to a fair result. In addition to this he was unable to reach a view as to whether there was so much new material that it would result in a breach of natural justice. And finally, if in the event there was a breach of natural justice, then Dorchester could resist enforcement of an adverse decision by the adjudicator on that ground.

It was perhaps a bit optimistic of Dorchester to ask for a finding of breach of natural justice in advance, so to speak. However the judge did fire some warning shots. He reminded the adjudicator that he had to continue to conduct the adjudication fairly which might mean extending the timetable further. He also reserved costs which meant that if the decision was successfully challenged on natural justice grounds, Vivid might end up paying them. So in one sense Dorchester may have achieved its aim.

First published in Building magazine

Tim Elliott QC is a member of Keating Chambers and has specialised in construction, engineering, energy and professional negligence work for over 30 years. He has wide ranging experience of all aspects of these fields in litigation and all forms of alternative dispute resolution such as arbitration and adjudication. Tim Elliott has been recognised for excellent advocacy skills and hands on approach to cases which has made him a popular choice with U.K. and overseas clients which include local and national governments, public authorities, developers, funding institutions, national and international contractors and sub-contractors, architects, surveyors and engineers.

In additional to work as advocate and advisor Tim Elliott acts extensively as an arbitrator, adjudicator and mediator.

The articles and papers published by Keating Chambers are for the purpose of raising general awareness of issues and stimulating discussion. The contents must not be relied upon or applied in any given situation. There is no substitute for taking appropriate professional advice.

For further information on how our members can assist you, please contact the Senior Clerks, John Munton and Nick Child, in the first instance, on +44 (0) 20 7544 2600. They and their teams of Clerks will be pleased to advise you on the member of Keating Chambers appropriate to your requirements.

© KEATING CHAMBERS

http://www.keatingchambers.com

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