Adjudicators Decision and Natural Justice

Hello and welcome to this week's Blog, which will look at natural justice within construction adjudication. Since the introduction of Construction Adjudication with the Housing Grants and Construction Act 1996, the courts have been keen to enforce an adjudicator's decision even if that decision is wrong. Adjudications are designed to be quick decisions that are only binding until resolved through arbitration or litigation. It is worth noting that the adjudicator's decision is binding on the parties even if there has been a procedural error, such as the adjudicator not following the rules of natural justice, as set out in the case of Macob Civil Engineering Ltd v Morrison Construction Ltd 1999. However, an adjudication decision can be challenged in court where the rules of natural justice have not been followed, as can be viewed from the case of Global Switch Estates Ltd v Sudlows Ltd 2020, where the court refused to enforce an adjudicator's decision following a breach of natural justice. The rules of natural justice are set out below:

(i) Each party should have the right to understand the allegations against them and to present their case.

a. An actual example of the parties not having the right to present their case is the recent case of Van Oord v Dragados 2022, where during the sixth construction adjudication between the parties, the adjudicator decided on additional time and prolongation costs awarded to Van Oord based upon a programme which both parties have rejected. In this case, the adjudicator selected the programme and did not discuss this programme being used as a basis for calculation with either party before issuing their decision. As the adjudicator reached their decision without providing each party with the opportunity to discuss the key dates and consequences, Dragados argued that it meant that neither party had the chance to present their case hence a breach of natural justice.

(ii) The tribunal should be impartial and free from bias when hearing each party's case

a. This area can be further expanded to enrapture that both parties should have the right to a fair hearing, however as demonstrated in the case of Chief Constable of North Wales v Evans 1982, the House of Lords does not extend the right to a fair hearing also to include the judgement being fair and reasonable. Look out for a future blog on adjudicators' bias.

It is worth observing that in the case of Cantillon Ltd v Urvasco Ltd 2008, the court set out a two-stage test in that the adjudicator must have failed to apply the rules of natural justice. The breach must be significant rather than minor. Therefore, using the precedent set out in this case, the adjudicator's decision could be challenged but would only be successful if a breach of natural justice has occurred and the effect of this breach is significant

Suppose you are considering commencing an adjudication or have received a notice of adjudication. In that case, it is vital to be supported by experts at every step. Likewise, suppose you have been on the wrong end of an adjudicator's decision and which to discuss. In that case, Velocity Dispute Management can assist you. If you wish to discuss how Velocity Dispute Management can support you or discuss this Blog's content, please get in touch with admin@velocitydisputemanagemet.co.uk or book a strategic review meeting where one of our consultants will review your situation and create an action plan to utilise your rights in law to resolve the problem.

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