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You might bet that HS Works was a happy subcontractor when it read the decision of adjudicator number one. That said Enterprise Managed Services, the main contractor, had better hand over the 拢1.8m it had withheld. But, quick as a flash, Enterprise brought another adjudication, this time to decide what the final account should be. The glint in Enterprise鈥檚 eye was that if adjudicator number two agreed with its calculations, it would not have to stump up that money.

Smart. HSW, on the other hand, smarted. Its 拢1.8m might disappear down the rabbit hole. You might think that all it had to do was to argue for a particular figure for the final account, and all Enterprise had to do was argue for a lower one. Well, er, it鈥檚 a bit more fun than that. It鈥檚 not for me to put words in HSW鈥檚 mouth but it鈥檚 plain from the story in the High Court that it believed it was a loony idea in the world to bring the final account to adjudication. Resign, resign, it shouted at the adjudicator.

Let me tell you the story. Enterprise has been working on one of those utilities term contracts that last several years. It鈥檚 for the maintenance of Thames Water infrastructure, and the inevitable carriageways repairs are subbed to HSW. That expired last year, so it was time to settle the final account for the subcontract. HSW said it was 拢31m or so. Enterprise said it was 拢25m.

Now then, pause to reflect that adjudication is all about sorting out a dispute under one contract in 28 days. Yes, yes, this one is a contract, spread over (wait for it) 51,000 job orders. The yell from HSW was that it was seriously and unfairly disadvantaged if it had to answer Enterprise鈥檚 claim in a few days. The only thing was for number two to pack his golf-bag and go play a few rounds instead.

You might think that all HSW had to do was argue for a particular figure for the final account, and all Enterprise had to do was argue for a lower one. Well, er, it鈥檚 a bit more fun than that

Enterprise then played a smart card. It offered HSW more time if, repeat if, HSW would pause its High Court action. No, no answered HSW, the process is so unfair that the adjudicator has no option but to resign.

The adjudicator, Mr Don Smith, dealt with all this beautifully. He鈥檚 a keen golfer. Image of Clark Gable. I half imagine he鈥檚 always ready to use that line from Gone with the Wind: 鈥淔rankly, my dear, I don鈥檛 give a damn.鈥� Of course he didn鈥檛 say that. Adjudicators are models of perfect calm. He simply said, 鈥淪han鈥檛鈥�. So, the scene was set for another gargantuan dispute to be decided in 28 days. Sounds more like Clark Kent than Clark Gable. As for HSW, it made plain that it was going on only under protest 鈥� and would go to court if it didn鈥檛 agree with the award.

As you might have guessed, it didn鈥檛 and it did. There are two interesting points here. One is about how the court deals with enforcing connected adjudications (I鈥檒l tell you about that another time). The second is whether the dispute is too substantial to be considered within the timetable; meaning daft or, as the lawyers put it, 鈥渦nfair鈥�. So the court, or in this case Mr Justice Akenhead, looked at how the adjudicator reached his decisions. He was also on the lookout as to what dialogue went on beforehand. That鈥檚 important. Did the complaining party have before it the other party鈥檚 case so as to fairly deal with it? That鈥檚 a warning to folk who sit on their hands, and the 鈥渙ne liner鈥� brigade who ask for 鈥渂etter information鈥�.

So, what procedure did the adjudicator adopt? It seems that he weighed up which side was more credible than the other. How? He did spot checks on large dispute items. In other areas he checked all the arguments. As the judge said: 鈥淚f spot checks reveal that one side鈥檚 quantum on a specific head is unjustified, that undermines the credibility of its position on that particular claim. That can legitimately lead to the conclusion that one side鈥檚 evidence is to be preferred.鈥�

When the contract expired last year, it was time to settle the final account. HSW said it was 拢31m. Enterprise said it was 拢25m

As for the pre-adjudication flow of information, the judge said HSW 鈥渃learly had more than enough information to hand to discuss and negotiate on the final account鈥�. Even a surprise expert report by Enterprise was not radically different from what must have been apparent beforehand.

So the adjudicator was right to prefer the case advanced by Enterprise on the final account, after which he went and played golf with Clark Kent.

Credit: Simone Lia