Oh No! Not that Adjudicator - he hates me!

The world of construction adjudication is a small one.  It involves a relatively small number of people who find themselves working with or against each other over and over again.  It is also a confrontational process done in a hurry which sometimes results in parties doing or saying things they probably would not have done or said away from the hothouse atmosphere of the adjudication or if they had been given the luxury of time to consider their actions.  Consequently, is not unknown for a degree of animosity, or at least a lack of trust, to arise between individuals.  That may not matter for most of the time, at least as long as you are on opposing sides.  But what if your Nemesis is appointed to adjudicate in one of your cases?

A recent case took this situation one stage further still.  In Lanes Group PLC v. Galliford Try Infrastructure Ltd [2011] EWHC 1035 (TCC) the parties had been involved in a number of adjudications and the Claimant had been disappointed by the way one adjudicator had dealt with matters so when the other party commenced another adjudication the Claimant wrote to the nominating body asking that a different adjudicator be appointed this time around.

Imagine the Defendant's Solicitor's dismay when in response to his request for an adjudicator the nominating body appointed a Chartered Quantity Surveyor who some 14 months previously had opposed him in a "relatively acrimonious" adjudication.  The Surveyor had threatened legal action against the Solicitor for an (unintended) implication from a submission within the adjudication that the Surveyor had signed all the witness statement on behalf of the deponents.  In fact the Solicitor was saying that it appeared as if they had all been signed by the same hand but he was not saying that the Surveyor had anything to do with it.  Nonetheless, the Surveyor took the submission as a personal affront and used some forthright language in respect of it to the adjudicator.

The Surveyor's client went on to lose the adjudication and withdrew a series of further adjudications which had been in the pipeline.  The Surveyor consequently incurred a bad debt, presumably as a result of his client becoming insolvent.

The Defendant's Solicitor was concerned that his opponent in the previous adjudication may harbour a grudge so he simply started his client's adjudication process afresh and sought yet another adjudicator from the nominating body, one acceptable to both sides.  The Claimant responded by issuing proceedings in the High Court for an injunction against the Defendant continuing or making further applications to adjudicate the dispute.

In support of the injunctive proceedings the Claimant made some esoteric and unsuccessful legal submissions which meant that the High Court dismissed the claim such that the case is now authority that:

"...in the HCGRA and in many standard form adjudication agreements ... a referring party [may], time and again, if it did not "like" the adjudicator nominated, ... withhold service of the referral documentation so that the adjudication lapses, thus enabling it to seek a nomination which it does "like". "

The court acknowledged that this would be an abuse of the contractual and statutory process but that was the consequence of a defect in the law as it stands.  The Judge also observed that (surprisingly) he had not been asked to consider the argument that one can only refer a dispute to adjudication once; the same matter may not be referred a second time.  He even suggested that had that argument been deployed before him he may have come to a different view.  As matters stand, however, the Referring Party effectively has the right to veto a nominated adjudicator.

Michael Bonning is an Associate in the Michelmores Construction Team. For further information on any of the issues raised in this article, please contact Michael at michael.bonning@michelmores.com or on 01392 688688.