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Allegations of misconduct are a sure sign of dissatisfaction

legal matters

The world of construction arbitration is relatively small and surprisingly social. There are numerous construction law bodies providing arbitrators with the facility, ostensibly, to share news, views and experiences, but really to allow you to meet up with your mates and have a chat.

At one such gathering I met a chap who looked distinctly unhappy. 'I am very worried about this case, ' he said. 'Why, what is it about?' I asked. 'It is this case, ' he replied, mopping his brow with a large handkerchief and waving a bit of paper. I caught sight of the name Strachan and Henshaw v Stein Industries (l997). 'The court has removed the arbitrator for misconduct, 'he went on.

'Well, I shouldn't worry, ' I said. 'These things happen, ' although I could have added: 'Especially if the arbitrator and the judge used to be in chambers together and are poles apart in terms of personality and the law, and over the years developed a distinctà umà lack of synergy for each other.'

However, I doubt whether it would have helped. 'But I do worry, 'my fellow arbitrator chided.

'The arbitrator is a senior construction QC. He is a past president of the Chartered Institute of Arbitrators and if he can be guilty of misconduct, what hope is there for me?'

Clear evidence, if evidence was needed, that for many arbitrators, allegations of arbitral misconduct are seen as personal attacks on their probity and something to keep them awake at night.

In fact, conscientious arbitrators have little to fear from the law in this regard. It has always been difficult to appeal against an arbitrator's award. Before the l996 Arbitration Act, misconduct was one of the few grounds on which one of the parties could apply to set aside an arbitrator's award. It is an inevitable fact of life for those involved in the business of dispute resolution, that a least one of the parties will be dissatisfied with your decision.

Furthermore, judges who are more familiar with the appeal process, recognise that to err, in fact or law, is not only human, it is also an occupational hazard.

Under the old law, therefore, a dissatisfied party who felt strongly that the arbitrator had got it wrong, had no alternative but to dress up the arbitrator's procedure or ultimate findings as misconduct. Such a course was all the more likely because the parties could wait until they knew the result before leaping up and complaining.

Experienced arbitrators knew only to well that, in most cases, an allegation of misconduct was no more than a procedural hook upon which to hang an appeal. As one judge was at pains to point out: 'It is conduct which is only misconduct in the eyes of the law and in no way reflects adversely upon the bona fides or care or conscientiousness or fair-mindedness of the arbitrator.'

All these points were aired afresh in the case of Balfour Beatty v Kelston Sparkes (No.2) (2001).Balfour Beatty disputed the claim of its earthwork subcontractor, Kelston, for nearly £2 million for additional works and delay. The dispute was referred to a well-known construction arbitrator (and vice-president of the Chartered Institute of Arbitrators). After an eight-day hearing, and before the arbitrator published his award, he notified the parties that he required further assistance on a couple of points. There was then a flurry of correspondence between the arbitrator and the parties, during which the parties submitted further evidence and the arbitrator disclosed, in draft, part of his award.

After a further hearing, the arbitrator published his award. Balfour Beatty complained that the arbitrator had misconducted himself and behaved unfairly. Kelston argued that, far from being unfair, the arbitrator had bent over backwards to give Balfour Beatty every opportunity to put its case.

Ultimately, however, the arbitrator had to draw a line somewhere and make a decision.

Having agreed to arbitration, the parties were stuck with the arbitrator's findings. Just because Balfour Beatty did not agree with them did not mean that the arbitrator was guilty of misconduct. The judge agreed that the arbitrator had 'conducted the proceedings without the slightest apparent or actual unfairness, let alone unfairness sufficient to justify his removal.'

Worried arbitrators take heart.

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