| Date | 2 July 2003 |
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| Judgment | Pring & St Hill Limited v Southern Erectors, TCC 31 July 2002 |
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| The Issue | Whether adjudicators may conduct multiple adjudications on connected or related matters. |
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| Implication |
Where there is a risk that an adjudicator will be in possession of knowledge concerning a dispute which he will be unable to pass on to both parties in an adjudication, he should decline the appointment as adjudicator. |
printThe decision in the case of Pring & St Hill v Southern Erectors will serve as a warning to adjudicators and adjudicator nominating bodies to be particularly cautious before accepting appointments for two or more adjudications concerning the same project. Sir Robert McAlpine had engaged Pring as a subcontractor to install glazing for a new building at Caspian Point in Cardiff. The subcontract included the site erection of support steelwork for the glazing. During the course of the work, a large number of panes of glass were damaged by welding spatter and sparks from the grinding of welded joints, as a result of which McAlpine had to replace them. Disputes then arose as to who should pay for the cost of this work and this set in chain a series of adjudications between the various parties involved in the construction works. A first adjudication was commenced by McAlpine against Pring claiming damages for the replacement of the glass. It appears that Pring accepted liability and it fell to the adjudicator to assess damages. The adjudicator concluded that McAlpine were entitled to recover some £125,000 from Pring. A second adjudication conducted by the same adjudicator was undertaken shortly afterwards to determine the final account between Pring and McAlpine. At this point, Pring turned its attentions to its sub-subcontractors in an attempt to recover the damages it had been forced to pay out. There were four parties that had been engaged by Pring for site works and who might have caused or contributed to the damage to the glazing. Pring however concentrated its attentions upon two, Southern Erectors and J C Howell. Pring applied to the Royal Institution of Chartered Surveyors for the appointment of an adjudicator to deal with these two disputes. In making those applications, Pring asked the RICS to consider appointing the same adjudicator as had dealt with the earlier two adjudications with McAlpine. The RICS readily agreed with this request and so too, without further enquiry, did the previously appointed adjudicator. Whilst clearly it was in Pring's interest to secure the appointment of this adjudicator, since he would have knowledge of the background of the claims and had dealt with the award of damages against them, the two sub-subcontractors were not so enthusiastic. Both wrote to the adjudicator objecting to his appointment. Southern Erectors also wrote to the adjudicator saying that they would not consent to their adjudication being run in parallel with the adjudication concerning Howell. They indicated that they thought there would be a serious risk that a breach of natural justice would arise if he was to act as adjudicator, noting that there was a risk that information gained by the adjudicator in the earlier adjudications, which would not be made available to Southern Erectors, might influence the adjudicator's judgment in deciding issues in this adjudication. Southern Erectors therefore invited the adjudicator to resign from his appointment. The adjudicator replied on the same day, refusing to resign and indicating rather grandly that he would reveal to each party all of the relevant information from the previous adjudications to ensure both parties were fully informed. He confirmed also that he would be dealing with the parallel adjudication concerning the other sub-subcontractor Howell, and that a joint meeting between all parties might be appropriate. The adjudicator therefore proceeded and in the event decided that Southern Erectors should pay some £33,000 to Pring. Southern Erectors refused to pay and the matter proceeded to enforcement in front of His Honour Judge Humphrey Lloyd QC. Southern Erectors presented to the court a number of reasons why the adjudicators' decision should not be enforced. Firstly, they argued that paragraph 8(2) of the Scheme for Construction Contracts demands that an adjudicator may not adjudicate at the same time on related disputes without the consent of all the parties to those disputes. Judge Lloyd agreed. The purpose behind paragraph 8(2) of the Scheme was to ensure that the parties had the right to consent to adjudications in circumstances where the adjudicator might acquire knowledge from other proceedings which the adjudicator might not, or might not be able, to pass on. He condemned the adjudicator's approach in taking it upon himself to usurp the rights of one of the parties on the assumption that that intrusion was in some way in its interests, because of the adjudicator's prior knowledge. The adjudicator had been unable to fulfil his undertaking to reveal all of the relevant information from the previous adjudications to ensure that both parties were fully informed. Indeed, this was never practicable, since it would not be in the power of the adjudicator to release his earlier decisions or evidence used in arriving at those decisions, which was private to the parties involved in the earlier adjudications. The result was that the adjudicator had proceeded without jurisdiction and this provided Southern Erectors with an absolute defence to the claim for enforcement. In addition, Judge Lloyd was satisfied that the adjudicator had conducted the proceedings in a manner which had breached the rules of natural justice. He considered that the adjudicator might have been predisposed to a particular view of the evidence, particularly the amounts claimed, since he had based his decision upon exactly the same amount that he had determined in his earlier decision. This was despite the fact that Southern Erectors had put that figure and all its constituent elements very firmly in issue for reconsideration. In conclusion, Judge Lloyd held that Pring's application for enforcement of the adjudicator's decision should be dismissed.
CJ-0325
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