Contact with the adjudicator can lead to allegations of bias if not disclosed

Paice and another v MJ Harding (T/A MJ Harding Contractors) [2015] EWHC 661(TCC)

Natural justice requires that every party has the right to a fair hearing and the right to be heard by an impartial tribunal. If an adjudicator acts in breach of the rules of natural justice, the court will not enforce his decision.

Unilateral communication between the adjudicator and one of the parties can give rise to allegations that the adjudicator is biased, which would breach the rules of natural justice because one party might not receive a fair hearing. The test is whether a fair minded observer would conclude that there was a real possibility that the adjudicator was biased.

In this case, the adjudicator failed to disclose his knowledge of one party’s previous contact with his office. The TCC found that this failure to disclose gave rise to the possibility of bias and refused to enforce the adjudicator’s decision.

Facts

A telephone call had taken place between the claimants and the adjudicator’s office manager prior to commencement of the adjudication. The court held that the telephone call should have been disclosed. The adjudicator had chosen not to do so and this failure meant a fair-minded observer would consider that there was bias. Choosing not to disclose the conversation made the possibility of bias more likely.

Comment

This case is a reminder that the adjudication process must be transparent and that adjudicators need to disclose all contact with the parties.

The fact that the telephone call took place two months before the adjudication was irrelevant to whether it should have been disclosed: it was not the timing but the topic of conversation and the conversation itself which mattered and gave rise to the possibility of bias.

The court referred to the guidance for adjudicators published by the RICS, (the adjudicator nominating body which appointed the adjudicator in this case). This guidance recommends that adjudicators do not speak to or meet with a party alone concerning substantive matters and that any conversation should be limited to procedural matters only. It also advises that if an adjudicator does speak to one of the parties, he must ensure that he personally makes the other party aware as soon as practicable of what went on in sufficient detail together with the impressions and or views that the adjudicator has formed as a result to enable the other party to respond.

A party wishing to speak to an adjudicator about any issues whether procedural or substantive, should consider emailing rather than telephoning the adjudicator or his office. An email can be copied to the other party which should avoid any possibility of apparent bias. If communication between one of the parties and the adjudicator does take place at any point in adjudication proceedings, the other party should be notified immediately and informed of the nature of the discussion.

This article was published by Walker Morris in May 2015.

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