The European Convention on Human Rights was enacted into U.K. law by the Human Rights Act 1998. The Act appends a Protocol setting out a schedule of basic human rights and the U.K. Courts are required to interpret legislation in accordance with those rights.
The facts of this case were somewhat unusual. The Claimants sought recovery in respect of defects in their property resulting in settlement and consequential damage to associated structures. The Adjudicator had found that the Claimants would not actually be out of pocket for some 20 years until remedial works were needed. Nevertheless he awarded them a substantial sum (some £3 million) which effectively constituted a fund for disbursements when the need for remedial works arose. The Claimants sought enforcement of the decision.
Although the Court refused enforcement on a number of grounds, the most significant related to the interpretation of the European Convention on Human Rights. Article 1 of the first Protocol provides that every natural or legal person is entitled to the peaceful enjoyment of his possessions and must not be deprived of them except in the public interest and subject to the conditions provided for by law.
The Court considered this article and held that in the particular circumstances of this case there was no justification for interference with the Defendant's possessions, that is to say their funds. The Court considered that it was unnecessary and inappropriate for the Claimants to proceed to adjudication in this case and that to enforce the decision would result in an unfair and excessive burden being placed upon the Defendants. There was no pressing need for a provisional decision in respect of the Claimant's claim.
The problems associated with obtaining a decision within a short time (six weeks) were not outweighed by the aims and purposes of the Construction Act. Further, if subsequent Court proceedings reached a different decision but in the meantime the Claimants had become insolvent, there would be no security for repayment of the sum awarded by the Adjudicator's decision.
This judgment breaks new ground in that Article 1 has not previously been considered in the context of statutory construction adjudication. It remains to be seen whether this Scottish decision will be regarded as one based solely on its unusual facts or whether it is to be of more general application. The trend in the Courts in England and Wales has been to enforce Adjudicators' decisions except where a manifest injustice would be caused to the paying party.
The Courts in England and Wales have recognised that payment should not be made to an insolvent party although there was no suggestion here that the Claimant's financial situation was in any way parlous. It might be said that the Defendant's "remedy" if dissatisfied with the result is to commence proceedings in Court seeking to obtain a different result.
Perhaps even more controversially, the Court also said (although this was not part of its reasoning) that, if a very substantial mistake of fact, for example in arithmetical addition, was made, a Court "would be bound to intervene". The Courts in England and Wales have taken a different view of this issue since the leading case of Bouygues (2000) and it seems doubtful that this wording will be supported in England and Wales.