ARTICLE
9 January 2025

"Rough And Ready" – Court Rejects Arguments That Adjudicator's Comments Were Biased And Impacted Natural Justice

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The Technology and Construction Court (TCC) upheld the adjudicator's decision in the case of Essential Living (Greenwich) Limited v. Conneely Facades Limited [2024] EWHC 2629 (TCC), rejecting allegations of bias and breaches of natural justice.
United Kingdom Litigation, Mediation & Arbitration

The Technology and Construction Court ('TCC') recently enforced the decision of the adjudicator in the case of Essential Living (Greenwich) Limited v Conneely Facades Limited [2024] EWHC 2629, despite the defendant's suggestion that the adjudicator had predetermined the case at an earlier stage in proceedings.

The claimant's position

The claimant ('Essential') engaged the defendant ('Conneely') to carry out the design, construction, coordination, and commissioning of rainscreen cladding, curtain walling, glass doors, and glass screen works at a development at Greenwich Creekside, in June 2017. In February 2024, Essential issued a notice of intention to refer a dispute to adjudication to Conneely, which concerned alleged defects in the cladding system installed by Conneely. Essential sought to recover costs in the region of £1million to rectify the issue.

The defendant's argument

Conneely argued that the defects were due to failures of other parties under the contract, and not due to workmanship failures on their part. Conneely also argued that Essential's attempts to recover costs from them in this adjudication had already been dealt with in a prior adjudication with a separate contractor, and so Essential's arguments in the present matter amounted to a 'double recovery' of costs.

The adjudicator's comments

On 20 February 2024, upon reviewing a request made by Conneely for disclosure of documents purportedly held by Essential which related to their 'double recovery' argument, the adjudicator noted that Conneely's double recovery argument was, in his words, "fanciful". This was because the appearance of the present defects was not an issue in the previous adjudication, and therefore, in his view, the previous adjudication was not relevant to the current dispute between parties. The adjudicator therefore rejected Conneely's request for disclosure of documents from Essential. The adjudicator subsequently issued his decision on 19 April 2024, which favoured Essential's position.

Pre-determining the issue?

In defending Essential's action raised before the TCC for enforcement of the adjudicator's decision, Conneely argued that the adjudicator's remarks in February 2024 suggested that he had pre-judged the issue before him. They sought to rely on the cases of Helow v Secretary of State for the Home Department and Resolution Chemicals v Lundbeck, which addressed the test for apparent bias. The correct approach was to consider whether a fair-minded observer would conclude there was a real possibility of bias, and in the present matter, Conneely argued that the adjudicator's description of their double recovery argument as "fanciful" suggested he had reached his conclusion at an early stage in the adjudication process before considering the submission and evidence, therefore undermining his impartiality. His alleged bias, in their view, materially breached the rules of natural justice.

Decision of the TCC

The court held that the adjudicator's remarks in February 2024 did not amount to a pre-determination of the issue. The judge remarked that the adjudicator has a particularly onerous duty in the adjudication process, due to the speed at which decisions must be made. He further noted that the adjudicator is not an arbitrator or a judge, and so the "rough and ready" nature of adjudication does not afford the adjudicator the luxury of preparing highly refined and extensively reviewed judgments in the way that court procedure does.

In any event, the court held that even if there were to be a finding of pre-determination in this case, it would not have materially impacted the outcome. The judge held that the adjudicator had given Conneely every chance to put its case forward, and that Conneely had abandoned its 'double recovery' argument after reviewing some of the more limited documentation which was provided to them by Essential as part of Conneely's disclosure request. The court noted that the adjudicator had "fairly and thoroughly considered the issues before him", and it was not necessary to analyse his decision in any greater detail.

Also, the court agreed with Essential that Conneely had waived its natural justice objection because it paid the adjudicator's fees in full without expressly reserving its objection.

Ultimately, the judge enforced the adjudicator's decision in Essential's favour, further noting that the challenge was "unmeritorious" and had "caused the considerable delay in payment of the sums due". He considered the attack on the adjudicator to be "wholly inappropriate".

Lessons learned

This case highlights that:

  • The court will usually require a serious breach of natural justice which has materially affected the outcome of proceedings before deciding not to enforce the decision of an adjudicator.
  • The court is likely to consider remarks made within the "rough and ready" adjudication process should not be given such weight as to suggest a breach of natural justice, but rather, should be viewed as a symptom of the demanding nature of the adjudication process. With that said, it would be prudent for adjudicators to express themselves carefully to avoid giving the impression of prejudging matters.
  • Payment of an adjudicator's fees without reserving a potential natural justice objection is likely to be deemed a waiver of that objection.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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