Kindly leave the stage

It’s an accepted rule that if an adjudicator throws out a claim, the losing party can’t rush out and hire another one. But in this case, that’s exactly what happened …

“It is so easy to answer a question, as an adjudicator, not put by the parties. ‘The voices’ shout an answer ... and it enters the decision”

Is it my imagination or is hotel alteration and refurb work unusually prone to rows? The Great Western Hotel at Paddington is a big refurb. Costain and Skanska Joint Venture – CSJV – is the main contractor, and it is very professional. Emcor Drake & Scull, or EDS, is one of the subcontractors responsible for the design and installation of electrical services on the job. It is very professional, too. Its subcontract is DOM/2.

Things ran late. CSJV awarded an extension of time to 23 July 2001. Not long enough said EDS. The job got finished seven months later than that, at the back end of February 2002. So the subcontractor compiled an extension of time claim, explaining why and how the works in the bedrooms had been delayed. “Tish, tosh,” said the main contractor.

So EDS called for adjudication on its bedroom claim. It explained carefully to solicitor and adjudicator Jon Miller why it was entitled to an extension. He explained, equally carefully, why it was not. It didn’t have enough evidence to show critical delay to the bedrooms. EDS was, he said, not entitled to an extension of time on account of the facts and matters set out in the referral. Fair enough?

EDS had another think. It explained to the main contractor that if it was correct that no critical delay occurred because of work in the bedrooms, then it was other works of the main contractor that were late, and they delayed the bedrooms. “Tish, tosh” was the reply of CSJV. So along came the adjudicator. This time it was solicitor Chris Hough. Just a minute, said the main contractor, you can’t go over the same ground as a previous adjudication and come up with a new decision. The adjudicator carefully weighed his job as the second adjudicator and said it was a different adjudication. He awarded the extension of time plus £200,000 compensation to EDS.

The main contractor wouldn’t pay. So the subcontractor asked the High Court to help enforce. There were several points in the main contractor’s defence. The one I have picked for you is this. It was said the second adjudicator considered facts and matters that had been adjudicated upon and reached conclusions in relation to those facts and matters that were contrary to those that had been reached in the first adjudication, and by which he was bound. So that made his endeavour void.

I should add here that an adjudicator must respect the decision on a point decided in an earlier adjudication between the parties.

So, what had the first adjudicator decided? The court was told that he decided that the subcontractor had delayed the works. Actually what was written by the first adjudicator was that the evidence in the referral did not indicate the extent to which the subcontractor was responsible for having delayed the completion date. That is not the same as declaring that the subcontractor had caused any delays.

The second adjudicator decided, when he looked at the bedroom claims, that EDS had caused delay to itself but that that delay was not on the critical path. The bedrooms were, he said, not involved in delay to the works. The case put by the subcontractor was convincing to the second adjudicator. EDS no longer complained about delays in the bedrooms; it complained about “heads” of delay elsewhere. The court enforced the second adjudicator’s decision.

Can you see how careful the adjudicator has to be in making “declarations” about what did or didn’t occur?

It is so easy to answer a question, as an adjudicator, not put by the parties. Adjudicators sometimes tell themselves they have spotted an argument not thought of by the parties. And “the voices” shout an answer … and it enters the decision. The first adjudicator simply answered what was asked and said “not enough evidence” – that’s a tad different to saying “you are to blame”.

The second adjudicator was sharp enough to accept the argument that his predecessor had made a distinct finding. Sharp enough to take the extension of time point on from there. He didn’t revise the first decision, he continued from where it left off. Don’t listen to “the voices”.

Readers are invited to forward recent judgments for reporting in this column (with full acknowledgement) to: Tony Bingham, 3 Paper Buildings, Temple, London EC4Y 7EU. DX: 37164 Biggleswade.

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