The Court of Appeal has ruled that a failure by a litigant in person to include his Particulars of...
The principles of natural justice frequently arise during the adjudication process. Introduced by the Housing Grants, Construction and Regeneration Act 1996, adjudication is notorious for being a quick fire dispute resolution system. Adjudication is a 28 day procedure, which cannot be varied by contract. The speedy nature of the system invites arguments that the process did not comply with the principles of natural justice.
In The Dorchester Hotel Ltd v Vivid Interiors Ltd [2009], The Dorchester employed Vivid to carry out refurbishment work. A dispute arose concerning the final account. Vivid referred the dispute to adjudication. The Referral Notice was accompanied by 37 lever arch files. Vivid made several claims and also altered figures within the final account. The Dorchester sought declarations to the effect that, because the timetable was too tight, there was a real risk of natural justice being breached. The question arose, should the Technology and Construction Court intervene to preserve natural justice?
The Dorchester’s claim was dismissed and the declarations were not granted. It was held that, although the court does have the power to intervene in an ongoing adjudication, it is rarely appropriate to do so. It is for the adjudicator to decide if there is enough time to conduct a fair adjudication.
In Bovis Lend Lease Ltd v Trustees of the London Clinic [2009], Bovis agreed to carry out redevelopment work on the Trustee’s property. Following a dispute, an adjudicator’s decision was issued in favour of Bovis, who then made a summary judgment application for the enforcement of the adjudicator’s decision. The Trustees submitted, along with other arguments, that there was too much new evidence for them to consider within the time period.
The Trustee’s argument failed and Bovis’ application was allowed on the basis that the Trustees did not raise the point at any stage during the adjudication. Therefore, the rules of natural justice were not deemed to have been breached in this case.
In Systech International Ltd v PC Harrington Contractors Ltd [2011], the adjudicator ruled that issues relating to the final account were outside his jurisdiction. Harrington sought a declaration that the adjudicator’s decision was in breach of natural justice, as he failed to address the defence that was put forward. Harrington was successful and it was found that the adjudicator had “unwittingly [fallen] below the standards which are required to enable the decision to be enforced”.
So what happens when an adjudicator does breach the rules of natural justice? Is he still entitled to his fees?
Systech argued that there had been a total failure of consideration. However, the adjudicator was able to produce a breakdown of his time sheets. He was also cross-examined about the reasonableness of his fees. Therefore, it was decided that there had not been a total failure of consideration and that the adjudicator was entitled to his fees.
In conclusion, it is unlikely that the adjudication process will be deemed to be in breach of the rules of natural justice on the basis of time scales or on the basis of the amount of material provided by one party to the other.
Even if an adjudicator is found to be in breach of the rules of natural justice, unless there has been a total failure of consideration or bad faith on the part of the adjudicator, he will still be entitled to payment.
For further information please contact Amanda Mehlin on 01689 887808 or by email amanda.mehlin@cwj.co.uk or Jill Lawton on 01689 887855 or by email jill.lawton@cwj.co.uk.