Shetland Islands Council engaged Highlands and Islands Airports Limited in 2005 for design, consultancy, planning services, project management and construction supervision for an extension to runways at Sumburgh Airport in the Shetlands. A dispute arose in connection with defects to the runway. The matter was referred to adjudication and the Adjudicator determined that a sum in excess of £2 million in respect of Shetland Islands Council’s breaches of contract was due to the pursuer. Shetland refused to pay on the basis that there had been a breach of natural justice.

The Adjudicator obtained “informal” legal advice from counsel during the course of the adjudication. The informal legal advice was obtained without cost in respect of the construction of this clause. He did not tell either of the parties about this advice, neither did he give either of the parties an opportunity to address him in respect of it. The advice related to the construction of clause 41.3. The contract was based on the NEC Professional Services Contract.

The Judge considered that if an Adjudicator had secret concerns about the construction of a particular clause then he could either ask the parties to address him on the construction of the clause or he could obtain legal advice with the parties’ knowledge and agreement. It was not appropriate for an Adjudicator to obtain informal “freebie” advice without sharing with the parties the terms of the advice or the advice itself. This was the case even where the advice was obtained without any cost and informally. As a result the Decision was not enforced.

In respect of severability, by far the greater part of the sum awarded by the Adjudicator could not stand as the informal advice related to it. As a result the entire Decision was not enforced.