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Appearance of neutrality is vital for reputation of adjudication

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The Housing Grants Act enables adjudicators to take the initiative in ascertaining the facts and the law relevant to any dispute while, almost in the same breath, requiring them to act impartially when reaching their decisions. Considering these provisions together, what exactly does the Act empower an adjudicator to do?

You will remember that adjudication was heralded as the quick-fire alternative to litigation or arbitration, designed primarily for the speedy resolution of construction disputes on site as they happened. The adjudicator, much like the stylish and idiosyncratic heroes of '60s troubleshooter series The Saint , The Avengers or even The Prisoner , was expected to jet in to a site hut anywhere in the country, at 48 hours' notice, investigate the dispute no matter how unwieldy, and turn out a useful, enforceable decision within the month.

In the early days, adjudication workshops made no bones about it: there was to be no standing on ceremony, adjudicators were to go out there and find out for themselves.

The adjudicator was expected to break eggs, think the unthinkable, grasp the nettle and build Rome in a day. After all, the Act expressly told them to take the initiative.

There have been many adjudications since then but few reports of pinstriped law enforcers arriving, with glamorous catsuit-wearing accomplices, in open-topped sports cars.

If any adjudicators were thinking of shaking off the traditional approach to dispute resolution and adopting a more pro-active role, two recent decisions of the Technology and Construction Court might have them rushing to hang up their bowler hats and umbrellas. In Discain Project Services Ltd v Opecprime Development Ltd (No.2) (2001) the adjudicator found himself the unwilling recipient of long telephone calls from the claimant's representative.

What the judge described as 'his natural courtesy' prevented him from cutting the conversations short. Although the adjudicator reduced the claimant's claim by 30 per cent and made a costs order against the representative because of his time-wasting, the defendants argued that these private telephone conversations were in breach of the rules of natural justice and unfair. Thus, even if the adjudicator was not actually biased, there was an appearance of bias, in breach of the duty to act impartially.

In Glencot Development and Design Co Ltd v Ben Barrett & Sons (Contractors) Ltd (2001) the adjudicator was asked by the parties to act as mediator.

When the mediation failed, the adjudicator resumed the adjudication.The defendant argued that the adjudicator's impartiality had been compromised by its involvement in the mediation and their decision was unenforceable.

In both cases the judges recognised that the demands of the Housing Grants Act make it difficult for adjudicators to conduct themselves without criticism.The freedom to act inquisitively does not allow them, however, to act unfairly.

The issue in both cases was whether adjudicators ought to obtain information from one of the parties in the absence of the other.

In the Discain case, the judge said that although there was no reason in law why adjudicators should not have a telephone conversation with individual parties, it would make life a great deal easier if they did not. Not for nothing are judges careful to ensure that administrative calls are made by clerks. If relevant information is received from one party, the rules of natural justice require that it is passed on to the other for comment.

In the Glencot case, the judge took the view that it was permissible for an adjudicator to receive evidence from one party alone, provided that the absent party was given a complete and accurate account of it. Long telephone conversations with verbose representatives and the heated exchanges of a day-long mediation both militated against fair play. As the court pointed out, in each case, there was no suggestion that either adjudicator was actually biased.

The question was whether their conduct was such as to give the appearance of bias. In each case the court found that the apparent unfairness was sufficient to render the adjudicator's decision unenforceable.

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