Adjudicators may face double trouble over proposed tests
What's the difference between 'impartial' and 'independent'? This is not an academic question designed to test your knowledge of the etymology of the English language. Well, it is, but it is also relevant to dispute resolution processes generally and adjudication in particular, writes Kim Franklin.
The Oxford English Dictionary defines 'impartial' as acting fairly between the parties. Independence requires the tribunal to have no connection with the parties. So it is possible to be independent but unfair, or connected but impartial. Hitherto the Construction Act has only imposed a duty on adjudicators to act impartially.
In the recent consultation paper* in which the Department of Trade and Industry (DTI) sets out proposed amendments to the Act, it is suggested that adjudicators should be both impartial and independent. This 'double test', it is claimed, would ensure the process is conducted fairly, and is necessary, given the speed and private contractual nature of adjudication.
On the face of it, few would argue with these objectives. But closer examination of the consequences reveals it may cause more problems than it solves. How independent does the adjudicator have to be to avoid falling foul of the test?
The construction industry is vast and employs thousands of people. The number of construction professionals is smaller. The number of professionals involved in disputes as consultants, or who act as expert witnesses, is smaller still. Ultimately, the world of construction-dispute resolution is tiny. The usual suspects appear as consultants, experts, advocates, arbitrators and adjudicators time and again. The Royal Institution of Chartered Surveyors appoints the largest number of adjudicators. Most adjudicators are therefore senior quantity surveyors with a lifetime's experience of the industry. Some adjudicators may work alone;
others for larger practices. But it will not always have been thus. How far back do you have to go to be sure the adjudicator has never worked for, or against, either party?
The small world of construction disputes generates a busy social whirl. The Society of Construction Law, the Chartered Institute of Arbitrators, the Society of Construction Arbitrators and the Construction Courts' solicitor and barrister associations all throw jolly good bashes. Even if they've never come across the parties before in their life, the chances are the adjudicator will know their representatives, or one of their experts, socially.
And then there's the portfolio. Maybe the adjudicator is not lucky enough to have a family trust, but they may own shares in one of the parties, or a parent company, or their family members may. Or they may have gone into print with their views on particular issues relevant to the outcome of the dispute.The court cases are littered with examples where the tribunal could arguably have been affected by some connection with the parties, and their decision challenged as a result.
This highlights another problem: the question is not whether, subjectively, the adjudicator's decision was affected by the connection they had long forgotten or by the investment they had overlooked. It is, objectively, whether a fair-minded observer would conclude that the connection would give rise to a real possibility of bias. So where do you draw the line?
The double test of independence and impartiality may present the reluctant party with an open ticket to derail the adjudication process.
They may raise their objections at the outset, requiring the adjudicator to give an account of themselves, their financial holdings and their political convictions. It's more likely, however, that they will keep their powder dry until the decision goes against them. Then they will call foul, raise the alleged connection, and challenge the adjudicator's decision.
To avoid the problem, adjudicators would have to disclose their lifetime's CV, divest themselves of all financial interests, and give up their professional social life. Alternatively, the DTI could reconsider the wisdom of the double test.
Kim Franklin is a barrister and chartered arbitrator at Crown Office Chambers. Visit www.
crownofficechambers. com *The consultation paper is available at www.
dti. gov. uk/construction/hgcra/hgcralead. htm