Adjudicators in the ultimate case of mistaken arithmetic
Fans of Douglas Adams' The Hitchhikers Guide to the Galaxy will know that the earth was no more than an elaborate computer created by an ancient race to discover the ultimate question.
The ultimate answer to life, the universe and everything, they already knew - it was '42' - hence the need to discover the question. Unfortunately, they were on the brink of finding out what it was when the earth was accidentally demolished to make way for a hyperspace bypass - but that is another story.
Fans of the hi-tech new process of adjudication will appreciate the importance of the ultimate question when considering whether the adjudicator has jurisdiction to give the answer.
In the recent case of Bouygues (UK) v Dahl Jensen , the adjudicator included the return of retention in their calculation of what was due in a dispute between contractor and subcontractor.
They released retention totalling £350,000, despite the fact that no one had asked them to do so. The effect of releasing it was to give a decision in favour of Dahl Jensen for £200,000.
Had they not done so, they would have awarded £l50,000 to Bouygues. Worse still, Dahl Jensen was, by then, in liquidation. If Bouygues paid the erroneously awarded £200,000 it would have disappeared into a black hole, with no prospect of even the Starship Arbitration bringing it back.
Bouygues went to court confident that here at last was an adjudicator's decision that the judge would be prepared to interfere with. To the surprise of many, the judge was not. Instead, he called upon the line of cases about expert determination and said that it did not matter if the adjudicator gave the wrong answer, so long as they asked themself the right question.
The judge added that it was not difficult to make mistakes when doing complicated calculations and working under severe time constraints.
Although the adjudicator had plainly made a mistake, it was an arithmetical one and one that was within their power to make. The judge concluded that the purpose of adjudication was to provide speedy, provisional, resolution of construction disputes, whether they were wrong in law, fact or, as it turns out, arithmetic.
Bouygues, fuelled by disappointment, took the case to the Court of Appeal and we all looked forward to its verdict on the first adjudication case to reach that elevated tribunal.
There, it turned out, there were several ultimate questions to be addressed, not least the pronunciation of the claimant's name. I had been told (on good authority) that it could not possibly, if you looked at the spelling carefully, be 'bogey', and that, in fact, it was 'bweeg'. The Lord Justices of Appeal thought otherwise and pronounced it as if it were akin to a form of sexual offence.
The court was keen to explore the effect of insolvency legislation on the adjudication process, and granted a stay on enforcing the adjudicator's decision until an account of all claims and cross-claims (or mutual dealings) between the parties had been taken. As a result of the insolvency rules, only the balance due is payable to a company in liquidation, thereby preventing money from disappearing into a black hole before any appropriate deductions have been made.
On the ultimate question, the appellate court supported the judge at first instance and said that the error was one the adjudicator had jurisdiction to make and one with which it would not interfere.
To the chagrin of the anti-adjudication lobby, the court was quite uninterested in the wider question as to whether the courts should support adjudication, a process which was badly thought out at inception, the product of an Act which was badly written, and which is now acknowledged to be speedy, temporary and wrong.
It accepted the policy of the Technology and Construction Courts - first pronounced in Macob and developed subsequently - that unless it can be shown that the adjudicator had no jurisdiction to reach the decision they did, that is, that they asked themself the wrong question, the court would not interfere.