RSL (South West) Ltd v Stansell Ltd [2003] EWHC 1390 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

The Judge held that the parties to an adjudication should be given the chance to comment on any material used by the Adjudicator in reaching his decision. If an extension was necessary for this to happen, the Adjudicator should have explained this to the parties. A party to a dispute resolution procedure has a legitimate expectation that he will be afforded opportunities promised to him to present his case.

HHJ Seymour QC, Technology and Construction Court

16 June 2003

RSL engaged S to do construction work. The contract incorporated the provisions of the Standard Form of Domestic Sub-Contract DOM/2 1981 Edition with amendments. S accepted responsibility for delay to the commencement of its works on site and to subsequent delays up to a certain point, but disputed the causes of the rest of the delay to the completion of its works.

RSL claimed a sum for loss and expense, and gave S 16 days to respond. S did not respond so RSL gave notice that unless RSL heard from S by a certain date, it would assume the parties were in dispute. S's reply requested various pieces of information, and RSL referred the matter to adjudication. The Adjudicator decided that S should pay a sum plus VAT. S did not pay, and RSL applied for summary judgment.

S argued that the Adjudicator's decision was not binding because it had not consented to the Adjudicator's appointment of Mr A in relation to the programming issues, it had not had the opportunity to comment upon Mr A's final report before the Adjudicator reached his decision, and the Adjudicator had reached his decision in breach of the rules of natural justice. He had wrongfully delegated to Mr A the making of his decision in relation to extensions of time, and had simply adopted whatever conclusions Mr A reached, without making any assessment of his own.

RSL argued that the final report had not been made available to it either, and in any case, S had refused to allow the Adjudicator extra time, so there had been no time to permit consideration of the report before the Adjudicator's decision. S said it was never asked to consent to the grant of an extension so it could have the opportunity to respond to Mr A's report, but merely because the Adjudicator was pressed with other professional commitments. RSL stated that it was plain from the terms of Mr A's earlier report, which had been copied to the parties, that it was a preliminary report and was likely to be followed by a statement of Mr A's concluded views. The Adjudicator had power under the Contract to seek Mr A's assistance without the need for S's agreement. There had been no mention of a breach of natural justice by S before now and it had had a number of opportunities to explain this allegation and seek to prove it.

The Judge held that the parties to an adjudication should be given the chance to comment on any material used by the Adjudicator in reaching his decision. Both S and RSL should have had the opportunity to consider Mr A's final report and to comment on it. If an extension was necessary for this to happen, the Adjudicator should have explained this to the parties. A party to a dispute resolution procedure has a legitimate expectation that he will be afforded opportunities promised to him to present his case.

The parties could not anticipate what the final report would say before it was produced. The Adjudicator had taken into account a report that may have been of importance in his decision. This had not been disclosed to the parties, and this was sufficient in itself to mean that the Adjudicator's decision was in breach of the rules of natural justice and was therefore unenforceable.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

Click here to read full-screen | Click here to print the case