Pring & St Hill Limited v CJ Hafner t/a Southern Erectors 1

United Kingdom

An adjudicator under the Scheme cannot run related disputes in parallel without the consent of the parties. An adjudicator who has acted in a previous adjudication involving one of the parties may be biased and act contrary to natural justice if there is a chance that he will apply knowledge from a previous adjudication to the dispute before him.

HHJ Humphrey LLoyd QC, Technology and Construction Court

31 July 2002

P, a main contractor, brought an application for summary judgment to enforce the decision of an adjudicator in its favour against SE, its subcontractor. The adjudication was under the Scheme for Construction Contracts. P had brought the adjudication following an adjudicator's award against it brought by the employer. P was seeking by this and another adjudication to pass the losses it had suffered on to the subcontractors it considered to blame.

The same adjudicator as had determined the dispute between P and the employer was appointed to deal with the subcontractor adjudications. P asked for the two adjudications to be run in parallel. SE objected to this and also expressed concern that there was a serious risk of natural justice if the adjudicator decided the dispute.  The adjudicator decided to continue and awarded sums to P. 

SE claimed that the adjudicator could not adjudicate on the dispute with the other subcontractor at the same time without SE's consent, pursuant to paragraph 8(2) of the Scheme. The Court held that the two subcontractor adjudications were related. SE had an absolute right not to give consent to the adjudicator acting in parallel. The Scheme did not say that consent should not be unreasonably withheld. SE's refusal to consent was in any event reasonable. Therefore, the adjudicator did not have jurisdiction.

The Court also considered SE's argument that the adjudicator could be biased, since he had gained knowledge from the adjudication between P and the employer, which SE did not know, and the adjudicator might use that information. The adjudicator had examined the site previously, when SE was not present, and decided how much P should pay. The Court held there was a real risk that the adjudicator would apply knowledge from the previous adjudication. SE had realistic prospects of showing bias.

SE also relied on the fact that the adjudicator had made a number of errors in his decision and referred to the other subcontractor, rather than SE. The Court said this alone was not decisive, but SE had realistic prospects of showing that the adjudicator was not considering SE's position alone and that he may have been confused between the two parties.

The Court noted that on the face of it there had been a breach of the rules of natural justice as SE did not know the legal and factual roots of the case that the employer had put against P. P and the adjudicator did have such knowledge. The Court also noted that neither party had seen the final submissions prepared by the other and sent to the adjudicator; both had assumed that the adjudicator would forward them. It was contrary to natural justice not to pass final submissions to the other party when those submissions contained a case not previously presented. However, on the facts, this did not have any material consequences to SE.

The Court refused to award summary judgment.

An adjudicator under the Scheme cannot run related disputes in parallel without the consent of the parties. An adjudicator who has acted in a previous adjudication involving one of the parties may be biased and act contrary to natural justice if there is a chance that he will apply knowledge from a previous adjudication to the dispute before him.

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