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Foreseeing the future in this loophole world of legislation

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legal matters

One of the popular and recurring themes of the science-fiction genre is the notion of innumerable possible futures fanning out in front of us, each dependent upon any number of minor and apparently inconsequential acts of any given protagonist, writes Kim Franklin. Thus Captain Kirk, of the popular television series Star Trek, unwittingly changed the outcome of the Second World War when (for reasons that made sense at the time) he found himself back in 1940s America and instinctively saved a lady pedestrian from certain road-traffic death. Once saved, she went on to become a prominent peace campaigner and delayed America's entry to the war. The Nazis were able to win the race to the A-bomb and the rest was, or at least would have been, history.

Needless to say, once alerted to the outcome of his actions, Kirk had to revisit the same point in time and let the poor woman step out in front of the truck, unrestrained.

Likewise, when formulating legislation, legislator and draughtsman need to have a weather eye on the various factual permutations that may arise and to which it is intended that the statute should (or should not) apply. It is, of course, impossible to foresee all possible outcomes and the fact that the combination of human ingenuity and the wheel of chance frequently throw up factual situations that no one could have envisaged is a constant source of work for us lawyers.

There are two approaches to the problem. One is to draft a statute that is so detailed and tightly worded that there is no chance that any particular arrangement that is intended to be caught will escape. The other is to pass a statute that is so broadly worded that it is sufficiently flexible to cover all likely situations and leave the courts to clarify any unresolved confusion. Whether by design or accident, this approach was adopted for the adjudication provisions of the Construction Act. The four relevant sections are designed to cover the myriad possibilities that might arise in all the construction disputes that have occurred and are yet to occur. When you add in the additional variables of the different contractual provisions, the various adjudication rules and the variety of adjudicator nominating bodies that may be involved, it is perhaps nothing short of miraculous that only some 200 adjudication cases have reached the courts so far.

The recent case of AMEC v Whitefriars (28.10.04) involved a novel combination of facts that the Court of Appeal was required to unravel. AMEC was engaged by Whitefriars to carry out pre-construction works. The contract named 'George Ashworth of Davis Langdon & Everest' as the adjudicator for any disputes. Disputes arose over AMEC's entitlement to payment and AMEC's solicitors, contrary to the provisions of the contract, applied, under the scheme, to the RIBA to appoint an adjudicator. A Michael Biscoe of Biscoe Associates was appointed. He decided that AMEC was entitled to £508,000 plus VAT and interest.

Whitefriars successfully resisted enforcement of the decision on the grounds that the named adjudicator - Ashworth, not Briscoe - should have been appointed. AMEC's subsequent researches revealed that there was no George Ashworth at Davis Langdon & Everest and never had been. There was a Geoffrey Ashworth but he had died only a few weeks previously.

Without a named adjudicator, AMEC reasoned, the scheme applied and it was entitled to apply to the RIBA to appoint an adjudicator. In the interests of time and money, at AMEC's suggestion, the RIBA reappointed Mr Biscoe, who issued a second decision in which he found, unsurprisingly enough, that AMEC was entitled to £508,000 plus VAT and interest.

Whitefriars resisted enforcement again, claiming that the second adjudication raised the same issues as the first, that the adjudicator was biased, with the result that the second decision was in breach of the rules of natural justice and unfair.

The Court of Appeal disagreed. It held that there was nothing in the various factors relied upon by Whitefriars, taken individually or in combination, that justified the allegation of possible bias.

The Construction Act, it seems, foresaw that adjudicators may find themselves in some form of time warp but that there was nothing inherently unfair about that.

Kim Franklin is a barrister and chartered arbitrator at Crown Office Chambers. Visit www. crownoffice chambers. com

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