The Waterman Partnership Limited had been engaged by a deed of professional appointment dated 2nd November 1998 to act as LAP’s structural and civil engineers and traffic consultants for the development of Mid-Summer Shopping Centre in Milton Keynes. LAP maintained that Waterman failed to release substantial design information by specific dates and therefore had caused critical delay to the works. LAP claimed that Waterman were professionally negligent. The matter was referred to adjudication, and on 6th May 2003 the adjudicator decided that Waterman were to pay the sum of £708,796.95 (including interest), together with the fees of the adjudicator.

Waterman applied under CPR Part 8 for a declaration that the adjudicator did not have jurisdiction or exceeded his jurisdiction. LAP applied under Part 24 for summary judgment for the full amount of the adjudicator ‘s decision.

On 21st February 2003 Waterman stated that it did not accept the adjudicator’s jurisdiction for a variety of reasons:

1) He had previous knowledge gained in a previous adjudication which may contain confidential information.
2) He was a chartered surveyor not a suitably qualified professional engineer.
3) He purported to direct a response when the referral had at that stage not been made.
4) The referral was not to exceed 20 single sides of A4 pages in accordance with clause 16.3 of the deed, but the reference exceeded 1000 pages.
5) That within the time required Waterman did not have any reasonable opportunity of responding properly to the case.
6) The terms of the adjudicator’s remuneration were inconsistent with paragraph 25 of the scheme.

The adjudicator proposed to charge for each hour engaged in the adjudication. The Scheme did not explicably recognise changing by the hour. However, paragraph 25 of the Scheme entitled an adjudicator to “such reasonable amount as he may determine by way of fees and expenses reasonably incurred by him.” An hourly charge out rate was not in conflict with the Scheme and so HHJ Wilcox reject this challenge.

The contract considered that it might be desirable for an adjudicator to have some previous knowledge of matters to be adjudicated. Waterman submitted that prior knowledge was a breach of natural justice. If the adjudicator had been in possession of some prior knowledge he was obliged to tell the parties. If he had access to confidential information and he was unable to tell the parties then he should have excused himself. In this case the adjudicator considered the risk and could not identify any confidential information. The submission was therefore rejected.

The parties can agree in advance to limit the number of pages which may be considered in an adjudication. LAP clearly ignored the provision requiring only 20 pages by submitting in excess of 1000 pages. However, the 20 page Referral Notice was a summary, and provided that it sufficiently identified the dispute the adjudicator was entitled to refer to the other documents under paragraph 30(a) of the Scheme.

Waterman argued that there was no dispute at the time of the reference, or that the dispute decided was not the same dispute that existed at the time of the reference. Further, there was a breach of natural justice because Waterman were not given a reasonable opportunity to deal with the quantum claim. Waterman had for some time been seeking to obtain quantum information, and an amended version of the information and progress analysis was provided during the course of the adjudication on 21st March 2003. A range of authorities relating to whether a dispute had crystallised were considered. HHJ Wilcox said that there was a dispute concerning both liability and quantum in respect of the claim.

In respect of natural justice the issue of information resurfaced, as on 11th April a supplemental statement was served in order to deal with deficiencies in the original quantum statement. This was despite the production of in excess of 1000 pages in the referral. The Judge considered this an evidential ambush that was “clearly deliberate”. Nonetheless a mere ambush “however unattractive” did not amount to procedural unfairness. In this case the adjudicator should have precluded the supplemental evidence or given Waterman a reasonable opportunity of dealing with it. If there was insufficient time for Waterman to deal with it, then the adjudicator should have excluded the evidence. The adjudicator did not appear to appreciate that distinction, and there was, therefore, a substantial relevant breach of the rules of natural justice. As a result Waterman had demonstrated a live and triable issue for the purpose of Part 24.

Finally, Waterman argued that the adjudicator did not appreciate the distinction between an error, and a finding of professional negligence. They argued that the judicial review cases of Anisminic, O’Reill v Mackman and ex parte Page demonstrated that the adjudicator’s decision should be reviewed. What other purpose would there be in the adjudicator ascertaining the relevant law if he were empowered to ignore it and then decide the decision on the basis of his own ideas? Waterman argued that the approach of Macob and the Court of Appeal cases (including Bouygues v Dahl -Jensen) were inconsistent with the House of Lords decisions in respect of judicial review, which were of higher authority. HHJ Wilcox considered that it was not within his power to interfere with the adjudicator’s finding as he was bound by Bouygues (UK) Limited v Dahl-Jensen (UK) Limited [2000] BLR 522. Neither was he prepared to come to a final view on this matter. He noted that “a review as to the working of the Act in practice is perhaps now timely”.