What makes a good adjudicator?

Our Senior Partner, Simon Tolson, is a past Chair of TeCSA, the Technology and Construction Solicitors Association. Here, in an extract from a paper prepared for the TeCSA Adjudicator Panel, Simon explains what makes a good Adjudicator.  

Key Characteristics of an effective Adjudicator – attributes and skills

The TeCSA view has always been that it should set appropriately high standards for those who join its adjudication panel and who therefore may be nominated from time to time to act as Adjudicator. TeCSA keeps these issues under regular review as the law and practice is ever moving.

This is natural and normal as TeCSA has been at the heart of the development of statutory adjudication since even before its introduction with the 1996 Act. Indeed TeCSA (then ORSA) produced the first set of compliant adjudication rules in 1995.

Honesty and integrity

Being honest and impartial are a key characteristic of an effective Adjudicator and that attribute applies for as long as an adjudicator holds him or herself out. Of course, we have seen that some adjudicators come unstruck right at the start of the process when they accept appointments. 

Adjudicators, like arbitrators, should handle requests for information regarding their relationships with parties in a professional, considered manner, and should refrain from ‘descending into the arena‘. The repeat appointment of adjudicators/arbitrators is a fact of modern practice, which means that full disclosure, for the purposes of doing justice to the parties, is necessary in order to preserve the integrity of the relevant dispute resolution process. TeCSA takes this issue most seriously.

Make no mistake, adjudication today is a “formal dispute resolution forum with certain basic requirements of fairness” to quote from Fraser J who said in Beumer Group UK Ltd v Vinci Construction UK adjudication:

“… for all its time pressures and characteristics concerning enforceability, is still a formal dispute resolution forum with certain basic requirements of fairness…” and “ … although adjudication proceedings are confidential, decisions by adjudicators are enforced by the High Court and there are certain rules and requirements for the conduct of such proceedings. Adjudication is not the Wild West of dispute resolution.”

That also means an adjudicator needs to behave and conduct themselves with transparency and must have a clear rounded understanding of the law in relation to such things as actual and perceived bias. In Beumer Groupwe saw a striking example of obfuscation and poor candour by that adjudicator's failure, to disclose his involvement in a simultaneous adjudication involving one of the parties which was a material breach of the rules of natural justice.  After considering the relevant authorities on the matter, Fraser J determined that there was a clear breach of natural justice. By parity of reasoning with Dyson LJ in Amec v Whitefriars and, more recently, Coulson J in Paice and Springall v MJ Harding Contractors, he considered that if a unilateral phone call between the adjudicator and one of the parties could lead to the appearance of sufficient unfairness to deny enforcement of the adjudicator’s decision, then there was no scope for arguing the case before him did not also have the appearance of sufficient unfairness:

“If unilateral telephone calls are strongly discouraged (if not verging on prohibited) due to the appearance of potential unfairness, it is very difficult, if not in my judgment impossible, for an adjudicator to be permitted to conduct another adjudication involving one of the same parties at the same time without disclosing that to the other party. Conducting that other adjudication may not only involve telephone conversations, but will undoubtedly involve the receipt of communications including submissions, and may involve a hearing. If all that takes place secretly, in the sense that the other party does not know it is even taking place, then that runs an obvious risk in my judgment of leading the fair minded and informed observer to conclude that there was a real possibility of bias. All of this can be avoided by disclosing the existence of the appointment at the earliest opportunity.”

The Adjudicator’s Task

The process of adjudication has of course at its heart speed, economy, and some quasi arbitral principles. The adjudicator’s task is to:

• Ascertain the facts and the law;
• Without disproportionate expense, but that still means doing ones best;
• Within the constraints of the 28-day process as may be extended;
• Having regard to the contractual rules and the law;
• Having regard to the provisional and binding nature of the Decision;
• Act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting its case and dealing with that of his opponent; and
• Adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.

Key characteristics of a good adjudicator when deciding whether to accept an appointment

A pivotal moment for an adjudicator is of course when he or she is approached with a nomination. The very first question an adjudicator should ask himself, when deciding whether to accept an appointment, is “Do I have jurisdiction?” In other words, can the adjudication process be set in train at all? Whilst, an in-depth analysis is not necessarily required at this stage, an initial and proportional review to flag any issues should be undertaken by the adjudicator. In order to determine this, an adjudicator should ask himself the key questions listed below.

1. Is there a conflict of interest preventing me from acting?
2. Does there appear to be an obvious problem with any of the checklist jurisdiction issues listed below:

• Is there a contract?
• When was the contract entered into?
• Is the contract a construction contract within the definition of sections 104(1) and 105 of the HGCRA?
• Is the contract with a residential occupier and excluded by section 106 of the HGCRA?
• Does it relate to construction operations within the territorial application of the HGCRA?
• If the contract is not a construction contract under the HGCRA, does the contract expressly provide a right of adjudication in any event?
• Has the adjudicator’s appointment been made in accordance with the contract? Has the referral been validly made?
• Is there a crystallised dispute?
• Has the dispute arisen under the contract?
• Has more than one dispute been referred to the adjudicator? If not how closely related?
• Has there been a previous adjudication on the same dispute?
• Are the parties to the contract the same parties who are bringing the adjudication?

The adjudicator will have limited information at the very outset, but all of the key questions should be kept under review until any further information becomes available. The adjudicator should consider whether requesting further information from the parties might assist in resolving some of these key questions, and this can be balanced against the fact that the parties might by their conduct just submit to the adjudication process.

Anyhow, once an adjudicator has satisfied himself with the answers to these questions, there are two further questions that are worth asking, as a matter of good practice, before the adjudication process commences.

These are:

• Is the dispute too complex to be fairly determined within 28 days?
• Do I have the necessary expertise?
• Further, if there has been a previous adjudication, an adjudicator should also consider whether he has been asked to decide a matter on which there is already a binding decision by another adjudicator.

In addition, the adjudicator might wish to consider two further questions:

• To what extent is there jurisdiction to deal with the costs of the adjudication; and
• The jurisdiction to deal with slips, errors and mistakes in the decision.

Key characteristics on the job

Top ANBs like TeCSA expect adjudicators to have sufficient knowledge of the Acts and the relevant Statutory Instruments comprising the Scheme for Construction Contracts (‘the 1998 Scheme’ applicable to contracts under the 1996 Act or ‘the 2011 Scheme’ applicable to contracts entered into after 1 October 2011) (and together ‘the Schemes’) together with an understanding of the court’s interpretation of them at the time.

Adjudicators are expected to be aware of how the drafters of the standard form contracts have incorporated the requirements of the Acts into their documents and, where a particular standard form of contract forms the basis of the construction contract out of which the adjudication arises, grasp how that contract works and has been construed by the courts. Knowledge of the various procedural rules that apply under certain contracts will also be desirable.

Adjudicators are expected to have a detailed, accurate and conversant understanding of the current practice and procedure of adjudication and to have a sufficient knowledge of the general subject matter of the dispute to be able to identify the relevance of all matters before them. Above all else, adjudicators are expected to be available, and be prepared to carry out the function of adjudicator within the timescale allowed. This is a very important fact to note because it is almost certain that it will not be known at the time of nomination if the timescale will be extended, however complicated the dispute.

What makes a good adjudicator? What are their characteristics?  Are they different from those that make good arbitrators, or even good Judges?  Is one adjudicator better than another?  

At a meeting of Society of Construction Law on 11 May 2010, Coulson J as he then was  identified what were referred to as the “seven golden rules for adjudicators”.  It is worth sharing them here. They were:

(1) Be bold: Adjudicators have a unique jurisdiction, where the need to have the right answer has been subordinated to the need to have an answer quickly. Coulson reminds us that the adjudicator's decision can be incorrect (in terms of fact and law) and still be upheld. The important thing is that payment is made to the correct person. Adjudicators must remember that adjudication is all about ensuring that, where appropriate, payment gets to the right people at the right time.

(2) Address Jurisdiction issues early and clearly: Adjudicators should always deal expressly with any jurisdictional challenge, and they should not abdicate the responsibility for providing an answer, even if it is not binding.  They should consider the challenge applying common sense, but must avoid being too jaundiced.  There will be occasions (however late) when the jurisdictional challenge is made out, and in those circumstances, the adjudicator is going to save everybody a lot of time, money and effort by resigning then and there. The adjudicator should not shy from dealing with challenges relating to his jurisdiction. Better to exercise caution and withdraw at an early stage than have the decision overturned. Under the TeCSA Rule 12, the adjudicator can of course decide his or her jurisdiction. Ensuring an adjudicator has the jurisdiction to decide the dispute referred to him is of utmost importance to the adjudication process.

(3) Identify and answer the critical issues(s): Adjudicators must ignore, unless it is unavoidable, the sub-issues and the red herrings.  They should avoid being long-winded and instead concentrate on what they know to be the real point.  Everything else will usually fall into place. The adjudicator should make sure he identifies the issues in dispute and deals with each one giving only concise reasons for his decision.

(4) Be fair:  Wherever possible, the adjudicator should properly consider every aspect of the parties’ submissions.  If the adjudicator has planned out a timetable from the outset then the parties will know what they need to do and when, and disputes over (for instance) the admissibility of last-minute submissions will be much less frequent. The adjudicator should ensure that his decision is clear and free from ambiguities.

Part of fairness is to show no bias.  The test, which an adjudicator is required to apply when deciding whether the adjudicator should recuse himself for bias was stated by Lord Hope in Porter v Magill [2002] at paragraph 103: “The question is whether the fair minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased”.

In determination of their rights and liabilities, civil or criminal, everyone is entitled to a fair hearing by an impartial tribunal.   That right, guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms, is properly described as fundamental.   The reason is obvious.  All legal arbiters are bound to apply the law as they understand it to the facts of individual cases as they find them. The Adjudicator must always remain independent of the Parties. Helping the unrepresented Party may easily create the impression of bias. The limit of assistance is in the matter of not allowing one party to take advantage of the weaker party. Do not make a case for an unrepresented party. Safeguard the party from unfair advantage only.

They must do so without fear or favour, affections or ill-will, that is, without partiality or prejudice. Justice is portrayed  as  blind  not  because  she  ignores the facts and circumstances of individual cases but because she shuts her eyes to all considerations extraneous to the particular case.

(5) Provide a clear result:  Most decisions are lengthy and detailed. The adjudicator must always try and ensure that, at the end, they make plain precisely what each party must do as a consequence of the decision.

(6) Do it on time:  The adjudicator must complete the decision within the statutory period or any agreed extended period.  They must not allow the timetable to slip.  It is counter-productive to expand an adjudication from six weeks to three months, because it means that the parties have to spend a fortune, which they probably cannot recover, for a decision that either of them could challenge subsequently.  And when the adjudicator has completed the decision, it should be issued immediately. It ruins everything if, as happened in one recent case, the adjudicator completes the decision just as the time was expiring, and then sits on it for three days before deciding to send it out to the parties.

(7) Finally, the adjudicator should avoid making silly mistakes such as arithmetical errors, name and number transposition, awarding interest incorrectly etc.

It is hard to disagree with the rules Coulson J identified. The adjudication process is generally a quick one. In the early days, adjudication was described as quick and dirty, but temporary. It is not as dirty as it may once have been and often not in reality temporary so the essentials must focus on that expedition aspect and qualitatively it must be up there but bearing in mind it is still essentially a 28 to 42 day process. 

Conclusions

Adjudication is alive and kicking because it largely fills a need. Long may it. The procedure and timetable may vary, but the parties are still looking to you the Adjudicator to resolve the dispute, which will involve identifying the issues, weighing the evidence, deciding who wins what points and producing a legally robust reasoned decision. In my view the analytical skills requisite to determine the dispute will never leave us unless artificial intelligence becomes a game changer in this field.

There will always be a need for the Adjudicator to be as straight as a bat and a person with an affinity with the subject matter ideally learned as much from the university of life as the classroom.

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