There are two primary grounds on which the courts will refuse to uphold an adjudicator’s decision. One is where the adjudicator lacked or exceeded his jurisdiction. The other is where the adjudicator’s decision or the adjudication itself was affected by a failure to afford natural justice.
Natural justice means giving the parties a fair hearing, and among other things it requires an adjudicator to give the appearance that he has not made up his mind before hearing all of the arguments of the parties on the issues in the adjudication. In a judgment given on Wednesday in Lanes v Galliford Try, the TCC refused to uphold an adjudicator’s decision where he had issued a draft decision to the parties before rendering his final decision.
- The adjudicator, 18 days after receiving the referral, issued to the parties a “Preliminary Views and Findings of Fact” document, which set out his views on the substantive issues in the adjudication, and made various findings of fact based on the witness evidence presented by the claimant. The adjudicator sent this document to the parties before the respondent had served its response in the adjudication. At the time the respondent had requested more time to make its response, so it was known to the adjudicator that the respondent wished to be heard.
- The “Preliminary Views” document read like a draft decision. It also contained a statement by the adjudicator that:
“the Preliminary Views and Findings of Fact are a step in making my Decision and I am not bound by them nor do I commit myself to communicate nor issue amendments or further Preliminary Views and Findings of Fact”.
- Shortly after the “Preliminary Views” document was served on the parties, the respondent served its response in the adjudication.
- Around 1 month after issuing his “Preliminary Views” document (there were extensions to the adjudication timetable), the adjudicator issued his “Decision”. The “Decision” substantially reflected the findings the adjudicator made in his “Preliminary Views” document, and there were many similarities between the two documents.
The TCC held that the adjudicator’s decision was unenforceable because, by issuing his “Preliminary Views” document before having heard the arguments of the respondent, the impression was created that the adjudicator had made up his mind on the substantive issues at the time he issued that document. This conclusion was fortified by the fact that the “Decision” of the adjudicator substantially accorded with his “Preliminary Views”. The fact that the adjudicator had expressed his earlier views as being “preliminary” and not binding upon himself did not affect the conclusion that a fair-minded observer would reasonably make, namely that when he issued his “Preliminary Views” document, the adjudicator had already come to a view.
This case, which is the first reported instance of its kind in adjudication, highlights the dangers of adjudicators expressing preliminary views on matters before they have heard the full arguments of the parties. The vice here is giving the appearance of having reached a decision before having heard the parties, and it does not matter that the adjudicator may actually (i.e. subjectively) have retained an open mind after expressing his preliminary views.
Adjudicators should therefore not issue “preliminary” or “draft” decisions to the parties before having heard all of the arguments, and if a “preliminary” or “draft” decision is to be issued, it should only be done where:
- The parties have agreed that it can or should be done; or
- The “preliminary” or “draft” decision is made available to the parties for them to point out any clerical or similar slips in the decision, and not on the basis that they are to be given further opportunity to argue their cases. This is what usually occurs with judgments in TCC proceedings.