How Impartial Is The Naming Of An Adjudicator Within A Contract?
Do you name adjudicators in your contract forms or see them named in documentation received from your client? Either way the question of impartiality should cross your mind at some stage and may even result in, 'pen being applied to paper'.
Section 108(2)(e) states that the contract, 'shall impose a duty on the adjudicator to act impartially'. A decision which has not been arrived at impartially is not binding. Lack of impartiality is evidenced by bias, which is an attitude of mind preventing the person from making an objective determination of the issues that must be resolved.
"Actual bias" is where the tribunal is shown to be actually prejudiced for or against one party. "Apparent bias" is where a fair-minded and informed observer would conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased.
The requirement that the tribunal should be independent and impartial is one that has long been recognized by English common law. It is rightly not in dispute that the rule against bias applies to adjudicators appointed to determine disputes under the 1996 Act. Therefore, irrespective of Judge Lloyd's views that the parties may contract away their right to an impartial tribunal, it would appear that an adjudicator's decision tainted by bias will not be enforced by the Court.
Many organizations entering into construction contracts have a practice of naming one particular individual as Adjudicator in all their contracts. The "naming party" clearly considers there is some advantage in so doing. That intended advantage may be one of attempting to abridge time to bring the adjudicator into play. Those more cynical would say that the intention is to obtain an Adjudicator more likely to favour their case; that the adjudicator might want to keep "onside" with the "naming" party for future appointments. The other party is certainly likely to see it that way. Surely that comes within the definition of "apparent bias" as propounded by the Courts.
Of course, no adjudicator of any standing would allow themselves to be so influenced. However, bias operates in such an insidious manner that the person alleged to be biased may be quite unconscious of its effect. The RICS is not in favour of naming adjudicators in the contract. Amongst their reasons they say is the fact that the naming of the same adjudicator in a number of contracts may lead to accusations of possible bias. They, however, stop short of prevailing upon their membership not to accept such nominations.
His Honour Judge Havery QC, although this was not the issue before him, saw no wrong in one party insisting upon the adjudicator named in the contract. The other party would suffer prejudice in that he would be deprived of having the adjudication carried out by the person of his (and the other party’s) first choice. It seems likely therefore that a defence to enforcement of an Adjudicator’s Decision of apparent bias because the same adjudicator was named successively in a series of a company’s contracts would not succeed.
The chance of any legislative changes addressing this issue appears to be extremely low or nil. It appears also based upon Judge Havery's view that the Courts are unlikely to provide a solution. The ANB's such as the RICS should perhaps be clearer on this issue and recommend to their members that to accept such appointments is not compatible with the principles of the Institution.