Ellis Building Contractors Ltd v Goldstein – allegation of apparent bias against adjudicator

The fact that the adjudicator had received a without prejudice letter in evidence without the agreement of the defendant did not give rise to a valid claim of apparent bias. The fact that he decided the case on a basis which had not been argued by either side but which was open to him on the evidence was not a breach of the rules of natural justice. The claimant was accordingly entitled to summary judgment enforcing the decision of the adjudicator.

Comment

This decision addresses the increasing problem posed by the improper deployment in adjudications of without prejudice evidence of negotiations between the parties. This often arises because the parties represent themselves or, as was the case with this claimant, they are represented by consultants who are not legally qualified. The judge described it as a pernicious problem because most adjudicators are not legally qualified and there will often be a greater fear that the without prejudice evidence has influenced the adjudicator than there would be were the dispute being decided by a judge.

This is a problem that is likely to affect an increasing number of cases brought before the courts as we see more cases conducted by litigants in person once the legislation ending the recovery of success fees comes into effect some time next year. A material factor in the present case leading to the conclusion that there was no apparent bias was the failure of the defendant or his solicitors to object to the reference to the content of the without prejudice letter in the claimant’s reply. Five days elapsed, three of them working days, between the service of the reply and the issue of the decision. The judge concluded that as they had had the opportunity to raise it with the adjudicator during that period, the reasonable inference to draw was that they thought it was unlikely materially to influence his decision.  

This duty on a party’s solicitors to act as soon as they are aware that privileged documents have been put, or may be put, before a tribunal is an important one. In court proceedings, solicitors need to be vigilant to ensure that privileged documents do not slip into the bundles read in advance by the judge. Since judges now invariably read the evidence before a hearing, in practical terms it is extremely difficult to rebut the presumption that the judge has read the documents in the trial bundles. Although an application can be made to deal with the problem at the beginning of the hearing, it is safest to assume that anything in the trial bundles filed at court will not only be admissible in the case but could also be treated as in the public domain. As for the public’s right to access documents, the recent decision in British Arab Commercial Bank v Algosaibi Trading Services Ltd confirms that the right of the public under CPR 32.13 to inspect witness statements during a trial does not extend to the exhibits to those statements.

As a postscript, it is worth noting the distinction between adjudication and expert determination. Apparent or unconscious bias does not apply to an expert determination, as it would to an adjudication, arbitration or judicial decision. Where an expert gives an expert determination of a particular issue, he cannot be removed in the absence of actual bias (Bernhard Schulte GmbH v Nile Holdings Ltd). The determination will be binding between the parties unless it can be challenged on the basis of fraud, collusion, actual bias or material departure from instructions. If there has been negligence on the part of the expert, the damaged party may sue the expert in respect of any loss suffered. For a recent Court of Appeal decision about the court’s role in determining whether an expert has jurisdiction to determine an issue under an expert determination clause, see Barclays Bank plc v Nylon Capital LLP.