So what do we mean when we talk about liability of adjudicators or protection from liability? Essentially, it is immunity from a claim for damages for professional negligence. When considering who has immunity, as a starting point, you need to look at which legal system governs the duties and liabilities of the adjudicator. This will be a mix of the parties’ agreement, the law governing the adjudication agreement, the law of the place of the adjudication and perhaps the law of the country where any enforcement takes place.

Payment of adjudicators

In the UK, of course, at the end of 2012 questions relating to the enforceability of adjudicators’ decisions (and potentially maybe the liability of adjudicators themselves) became a particularly hot topic following the decision of the Court of Appeal in the case of PC Harrington v Systech International Ltd [2012] EWCA 1371 (Civ ). The Court of Appeal found that one of the key points was what is an adjudicator contracted to do? The Scheme for Construction Contracts gives the adjudicator a number of powers which he exercises during the course of an adjudication. This lead the Court of Appeal to ask:

  1. Was the adjudicator’s contract with a party a divisible contract whereby the adjudicator was entitled to be paid for the actions taken throughout the adjudication process?
  2. Alternatively, was the agreement an “entire” contract which required complete performance and the delivery of an enforceable decision as a condition precedent to payment?

Lord Dyson stated that: “a Decision which was unenforceable was of no value to the Parties” and concluded that:

“I can see no basis for holding that Parliament must have intended that an adjudicator who produces an unenforceable decision should be entitled to payment.”

There are many ways in which a decision can be unenforceable. In Harrington, the adjudicator had not considered an aspect of the responding party’s defence. In Lee v Chartered Properties (Building) Ltd, the decision was “unenforceable by reason of its late delivery”.

Statutory or contractual immunity

During the discussions, that introduced the adjudication legislation in the UK, Nick Raynsford, the MP for Greenwich, said:

“If adjudication is to work, it is essential for the adjudicator to enjoy immunity from litigation. Otherwise, he will not be able to act quickly and expeditiously, but will be constantly looking over his shoulder, worrying about the prospect of a writ being issued by one of the parties who is aggrieved by the way in which he is proceeding. If we want swift adjudication, the adjudicator must have immunity.”

There was concern that if the adjudicator was exposed to claims from the parties, any award or decision might result in further litigation, and so the whole judicial process would be undermined. Further it was said that the cost of professional indemnity insurance could be prohibitive. If adjudicators are sued all the time, no one will want to do the job. However, the Government was not having any of it. The Government’s view was that adjudication is a contractual process. The adjudicator’s immunity should be restricted to the Contract in question, and that protection from actions taken by third parties should be a matter for contracting parties, not legislation. This is why s.108(4) of the HGCRA states that:

“The contract shall also provide that the adjudicator is not liable for anything done or omitted in the discharge or purported discharge of his functions as adjudicator unless the act or omission is in bad faith, and that any employee or agent of the adjudicator is similarly protected from liability.”

This is also why Rule 32 of the TeCSA Rules states that:

“32. Neither TeCSA, nor its Chairman, nor deputy, nor the Adjudicator nor any employee or agent of any of them shall be liable for anything done or not done in the discharge or purported discharge of his functions as Chairman, deputy or Adjudicator (as the case may be) whether in negligence or otherwise, unless the act or omission is in bad faith.”

In contrast, s.30 of the Building and Construction Industry Security of Payment Act 1999, in New South Wales says that:

  1. An adjudicator is not personally liable for anything done or omitted to be done in good faith:
    1. in exercising the adjudicator’s functions under this Act, or
    2. in the reasonable belief that the thing was done or omitted to be done in the exercise of the adjudicator’s functions under this Act.”

You cannot remove the protection enjoyed by the arbitrator/adjudicator by agreement. The protection is mandatory. However if there is no statutory process (for example Dubai) the adjudicator is solely reliant on the protection provided for by the contract.

Examples of bad faith might include the deliberate obstruction of proceedings, refusing to participate in tribunal’s deliberations (without good cause) or perhaps the “leaking” of details of award/decision before publication. Potential outcomes following a breach of good faith (or any other breach by the adjudicator), might include unenforceability of any decision on grounds of public policy (Systech), or the removal of that adjudicator (something more possible during the Dispute Board process). Though there may be other potential losses to the parties: abortive costs, the costs of re-hearing the reference, the adjudicator’s fees.

How wide is that protection?

Many adjudications arise under the contract. This means that they are often subject to the rules set out in the contract. So you need to consider what the rules actually say. The point about mentioning the TeCSA Rules earlier is to note the exclusion about negligence. Not every form of rules goes this far. Here TeCSA says clearly that the adjudicator is not liable for anything in the discharge of his functions as adjudicator “whether in negligence or otherwise“. If of course the words “whether in negligence or otherwise” carry any weight then this casts real doubt on the protection that other rules, which do not have similar wording, may give.

At common law, a contractual exclusion of liability (as opposed to statutory immunity) is only effective in excluding liability for negligence if the intention to exclude negligence is made clear. This goes back to the 1972 case of Gillespie Bros & Co. Ltd v Roy Bowles Transport Ltd where the words “all claims or demands whatsoever” were held to constitute an agreement in express terms that the trader indemnified the carrier against all claims without exception, including a claim arising from the negligence of the carrier.

The common law is in contrast to many civil jurisdictions, where again you need to look to the wording of the rules. In Germany, Section 29 of the DIS Rules on Adjudication says that:

“The adjudicator, the DIS, its officers and employees are only liable for intentional misconduct.”

So what about FIDIC?

FIDIC is very similar to the rules discussed above. Under item 5 of the General Conditions of Dispute Adjudication Agreement, the Contractor and Employer undertake that the Dispute Adjudication Board will not:

“be liable for any claims or anything done or omitted in discharge…of the Member’s functions, unless the act or omission is shown to have been in bad faith”

And agree to

“jointly and severally indemnify and hold the Member harmless against and from claims from which he/she is relieved from liability under the preceding paragraph”.

Procedural Rule 5 reinforces this by requiring that the members of the DAB shall:

“act, fairly and impartially as between the Employer and the Contractor, giving each of them a reasonable opportunity of putting his case and responding to the other’s case“.

But note the sanction. If the DAB does not do its job, it does not get paid:

“If the Member fails to comply with any obligation under Clause 4, he/she shall not be entitled to any fees or expenses hereunder and shall, without prejudice to their other rights, reimburse each of the Employer and the Contractor for any fees and expenses received by the Member and the Other Members (if any), for proceedings or decisions (if any) of the DAB which are rendered void or ineffective.”


This is an important consideration. What do the rules of the contract say? Does the adjudicator or DAB have to keep the process confidential? At the end of 2012, there were stories in the press about an action being taken in the Dubai courts against a three-member arbitration panel due to the way they were said to have handled private settlement negotiations during a stay in the arbitration procedure. Now whilst it strikes me as difficult to believe that the claims had any substance, certainly, in theory there could have been a breach of the DAB or Arbitration Agreement.

Rule 32 of the TeCSA rules states that:

“33. Unless the Parties otherwise agree the Adjudication and all matters arising in the course thereof are and will be kept confidential by the Parties except insofar as necessary to implement or enforce any decision of the Adjudicator or as may be required for the purpose of any subsequent proceedings.”

Item 4(j) of the FIDIC general obligation of the DAB also notes that the DAB shall:

  1. treat the details of the Contract and all the DAB’s activities and hearings as private and confidential, and not publish or disclose them without the prior written consent of the Employer, the Contractor and the Other Members (if any);

However, without that specific obligation, in some jurisdictions there may be a question mark as to the extent and nature of an adjudicator’s confidentiality obligations. That said, the wise adjudicator will, as a matter of course, expect to keep any proceedings confidential.

Third parties

It is thought possible that liability may attach to third parties in certain extreme circumstances. The adjudicator makes a ruling and the parties are bound to comply with it on a temporary basis. An adjudicator who makes a decision that a building is structurally safe where the building subsequently collapses injuring a third party might be liable in negligence to that person. In the UK, the statutory Scheme does not make provision for such a situation. The ICE Adjudication rules require the parties to indemnify the adjudicator against claims from third parties:

“7.2 The Adjudicator is not liable for anything done or omitted in the discharge or purported discharge of his functions as Adjudicator unless the act or omission is in bad faith, and any employee or agent of the Adjudicator is similarly protected from liability. The Parties shall save harmless and indemnify the Adjudicator and any employee or agent of the Adjudicator against all claims by third parties and in respect of this shall be jointly and severally liable.”

Others such as the CIC rules state that no duty of care is owed to third parties, but there has yet to be a court case to decide whether such a duty of care exists. An adjudicator could include in his own terms and conditions a provision that the immunity includes claims for negligence. However for this to work, those terms and conditions would have to form part of the arrangement. Equally, if you have to sign up to a Dispute Adjudication Agreement as provided for in the contract, it is unlikely that an adjudicator would be able to impose something. Most employer organisations will not be able to deviate from the terms of contract demanded by the funders.

Often parties have exclusion of liability clauses. In the UK this is subject to the Unfair Contract Terms Act. In the case of Ampleforth Abbey Trust v Turner and Townsend Project Management Ltd, one such clause was excluded on the grounds that it was unreasonable in trying to limit liability to the amount of its fee (£111,321) when there was a requirement to maintain PI insurance of £10 million.


Given the uncertainties surrounding the potential liability of adjudicators, it is important that sufficient professional insurance cover is maintained. Were there to be a successful negligence claim against an adjudicator this would inevitably increase the premiums for adjudicators and be another blow to the adjudication process. Remember that if you are an adjudicator you may well be required to maintain insurance in any event. Often maintaining insurance is a criteria for entry into the appropriate adjudicator list. For example Item 8 of the FIDIC - National Adjudicator Lists - notes that:

“FIDIC national Member Associations will decide upon admission criteria. The FIDIC guidelines (based on draft admission criteria for the ACE-UK Adjudicators Panel) can be summarised as follows:

- maintains adequate professional indemnity insurance.”


There are very few cases where it has even been suggested that action could be taken against an adjudicator. Indeed, one of the dangers of discussing topics such as these is that, however unwittingly, they all help start the ball rolling. That said, it was clear from the discussion at the DRBF conference that this is a topic which is of some concern to many who act as adjudicators or as members of dispute boards. However, in truth, the best way to guard against any such claims is always to understand above all else what your obligations under the contract or agreement actually are. What are you required to do? What are the time limits within which you must act? As importantly, what are you not allowed to do? What is the law you are operating under?