Going it Alone
There are times when, for one reason or another, a party to an adjudication decides that it is not going to participate in the proceedings or co-operate with the adjudicator. This has happened to me on at least four occasions I can recall and, coincidentally, I have just issued an adjudication decision where one of the parties in a second adjudication between the same parties concerning a second dispute between them on the same contract, elected, as it did in the first adjudication, not to participate. I can tell you it is quite a strange feeling being ignored by a party in a dispute that you are presiding over. So, when you are faced with such a situation, how should you proceed and is there a risk that your decision might not be enforced?
In answer to the first question, the first thing you must do is to make sure that you make every effort to contact the reluctant party and be careful to record your attempts by email and letter. I would even resort to getting your PA to telephone the reluctant party to make sure they have received your communications. Again, record both your efforts and your PA’s efforts in writing.
OK, so let’s assume that it has been made crystal clear to you that a party is aware of your appointment and it has, for whatever reason, decided to ignore your directions, how should you approach the adjudication? Is it appropriate to proceed on an “ex-parte” basis? How much investigation into the referral should you make? Should you have a meeting? What should you say in your Decision? All very important questions, the answers to which very much depend on the quality of the Notice of Adjudication and the Referral put before you by the claimant.
Put simply, if the Notice and Referral are well drafted, crystal clear and evidenced then you are probably safe to proceed on a “documents only” basis and, if you are convinced, grant the redress requested by the Referring Party in its Notice, taking care to confirm your attempts to engage the reluctant party and your approach to deciding the dispute based on the claimant’s submissions.
The problems arise when there are issues with the quality of the Notice and/or the Referral and you consider that questions need to be asked of the claimant in order to explain a point or provide missing evidence in order to substantiate an unsupported assertion. How far should you go with this approach?
Remember that you have been appointed to make a decision. You are expected to fulfil your duties without incurring unnecessary expense. You must decide what the relevant facts and law are and if there is conflicting evidence decide on the balance of probabilities which position is more convincing and why? Finally, you must produce a written decision explaining your approach, what matters you have considered and how you have reached your Decision. In reality, these functions should be capable of being discharged without the need for a meeting with only one party. Keep in mind that meeting with one party would incur added cost and could provide problems for you at a later date if your reluctant party then decides to enter the stage and suggests that you might have heard something at the meeting, at which it was not present, which it has not heard or been given the opportunity to comment upon. These are the sorts of problem that might become an issue at a future enforcement hearing and why I have, thus far, never met one party alone during the life of an adjudication.
Speaking of enforcement, will the courts enforce a decision where a Respondent has refused to participate? The answer is yes, demonstrated very clearly in two published decisions of the Technology and Construction Court TCC in cases between Mr Emile Lobo -and- Mr Robert Corich ([HT-2-16-000359] and [HT-2017-000076]) Mr Lobo had obtained an Adjudicator’s decision in a case against Mr Corich. Mr Corich hadn’t taken part in the proceedings and the adjudicator had decided that a sum of £630,022.66 was due from Mr Corich to Mr Lobo. The decision was enforced against Mr Corich and Mr Lobo had obtained a charging order over a substantial property owned by Mr Corich. Mr Corich had then commenced his own proceedings to have the adjudicator’s decision set aside, the enforcement judgement set aside and the charging order on his property removed. It is apparent that much of Mr Corich’s case was based on the premise that he was unaware of the original adjudication. The adjudicator had proceeded on an ex-parte basis, which Mr Corich claimed was in breach of the rules of natural justice and as a consequence Mr Lobo had unfairly received a decision in his favour. All very, very serious stuff.
The judgement handed down by Mr Justice Stuart-Smith makes clear that the court took the view that Mr Corich had ignored the adjudication proceedings and had in reality elected not to take part. The consequences for Mr Corich do not make easy reading as it was decided that there could be no challenge to either the adjudicator’s decision, the subsequent enforcement judgement or the charging order granted on Mr Corich’s property.
If this case doesn’t serve as a stark warning to parties not to ignore an adjudication and the Adjudicator’s directions, I don’t know what will. As for my fellow adjudicators, out there in the construction jungle, it is OK to proceed on an “ex-parte basis” if you have to, but be careful!
Peter Vinden is a practising Arbitrator, Adjudicator, Mediator and Expert. He is Managing Director of Gateley Vinden and can be contacted by email at firstname.lastname@example.org. For similar articles please visit www.gateleyvinden.com.