Second guessing an adjudicator’s determination

Recent UK case law has clarified the law about re-adjudication:

Paice v MJ Harding [2015] EWHC 661 (TCC) concerns a party resisting enforcement of an adjudicator’s decision on grounds of apparent bias and lack of jurisdiction.  There were unilateral communications between one of the parties to the adjudication, the adjudicator’s office manager and wife. The communications took place at a time when the adjudicator was not acting as adjudicator between the parties. Justice Coulson provided a summary of the law at paragraph 58 as to when an adjudicator is constrained from effectively re-adjudicating an adjudication determination:

  • The parties are bound by the decision of an adjudicator on a dispute or difference until it is finally determined by court or arbitration proceedings or by an agreement made subsequently by the parties.
  • The parties cannot seek a further decision by an adjudicator on a dispute or difference if that dispute or difference has already been the subject of a decision by an adjudicator.
  • The extent to which a decision or a dispute is binding will depend on an analysis of the terms, scope and extent of the dispute or difference referred to adjudication and the decision made by the adjudicator.
  • The approach is to ask whether the dispute or difference is the same or substantially the same as the relevant dispute or difference and whether the adjudicator has decided a dispute or difference which is the same or fundamentally the same as the relevant dispute or difference.
  • Whether one dispute is substantially the same as another dispute is a question of fact and degree.

In New Zealand, adjudication determinations are binding on the parties but adjudication may proceed in tandem with court proceedings, whether or not the adjudication process commences before court proceedings are issued (sections 26 and 27 of the Construction Contracts Act 2002 (‘CCA’). The adjudication process will only terminate if the other form of dispute resolution determines or resolves the disputed issue before the adjudicator does (section 26(3) of the CCA).

It is well established that the nature of a debt arising under the CCA is temporary in nature only (Horizon Investments v Parker Construction Management HC Wellington CIV 2007-485-332, 4 April 2007). Disgruntled parties seeking to ‘second guess’ the adjudicator’s determination may do so by

  • Initiating de novo proceedings on substantive matters by Court process or arbitration.
  • Judicial review or
  • Satisfying the limited grounds under the CCA in sections 52-55 (where the owner is not a respondent) and section 47(1)(3) (where the adjudicator has made a computational, clerical or typographical error).

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