Well, three cheers for their efforts. They have got it wrong of course, but hell's bells, why break the habit of a lifetime? The DTI proposes to amend the Scheme for Construction Contracts in three ways. It will be fiddled with to make clear that the role of adjudicators does not extend to an allocation of either party's legal costs, or expert costs, or staff costs, or consultant's costs. Next, it will set a deadline by which the parties may request reasons. And it will also introduce what is known as a "slip rule".
Let's look at each one, in reverse order. The "slip rule" is a well-known device in arbitration. It is intended to allow the arbitrator, and now adjudicator, to revisit the decision after publication so as to correct clerical or arithmetical errors. It is an "oops" rule. It is definitely not to allow or coax the adjudicator to have another think about evidence or decided facts or law. A party has five days from the date the decision is delivered to point out the "oops". Then the adjudicator is to correct the slip as soon as possible. If neither party spots the slip, there is no time limit on the adjudicator "becoming aware" and making the correction. The time limit in the Arbitration Act is 28 days; a mere five seems to me a tad tight.
Reasons in the decision are important. The scheme already says: "If requested by one party to the dispute, the adjudicator shall provide reasons." The revision allows the adjudicator to set a deadline for the request. Then it says that if a request is made after the deadline, the adjudicator can say no. I suppose this is all to do with the amount of time left in the 28 days for the adjudicator to write up the decision. Anyway, most adjudicators give reasons for decisions unless barred by the rules.
Giving reasons is vital, because people want to know why or how the result was arrived at. They learn lessons from the outcome. More than that, the idea of reasons is to oblige the adjudicator (and this goes for arbitrators too), to write out their reasoning. It is true to say that in the actual process of writing reasons, the writer might spot an illogical conclusion of his (or her) thinking. It takes courage to publish a daft reason. And there is one more thing: adjudicators' decisions are open to scrutiny by those who appoint adjudicators. If there is a daft adjudicator out there, he or she may need (how shall we say?) a little help.
Finally, is the attack on some naughty boys. These laddies require the other party to the adjudication to fork out for the opponent's legal or other costs irrespective of the outcome of the adjudication.
It is a sort of smack on the nose for having the impertinence to come to adjudication. The idea is to frighten you off before you start. So the scheme in England will be changed to say the adjudicator "shall not take into account any matter relating to the legal or other costs of the parties arising out of, or in connection with the adjudication".
I have some problems with this. First, how will this provision in the scheme stop the naughty boys from putting a naughty costs clause in their homemade contracts? The only hope is that it is arguable that the scheme conveys the intentions of parliament. Thus, if my in-house cobbled together effort includes something contrary to parliament's wish, then my effort should be void.
Second, the words leave it open for a party to claim those legal costs in subsequent litigation or arbitration, since adjudication is only a provisional decision. So the new rule in the scheme may encourage the dispute to go further, which is a pity. Third, it will be impossible to adjudicate small disputes, because the costs of so doing will not be recoverable there and then.
Having said all that, well done to the folks at the DTI. You get 6 out of 10, which is a heck of a good mark.
Postscript
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper 黑洞社区s, Temple, London EC4 7EY, or email him on info@tonybingham.co.uk.
