Upholding Fairness: Natural Justice and Bias Claims in Adjudication Rejected

Background

Essential engaged Conneely under a trade contract in June 2017 to design, construct, and install rainscreen cladding, curtain walling, glass doors, and screen works for a project at Greenwich Creekside. In February 2024, Essential initiated an adjudication claiming that Conneely’s Corium brick slip cladding system was defective, seeking approximately £1 million in associated costs. Conneely contested this claim, alleging that Essential’s complaint stemmed from the failures of other contractors rather than their own workmanship. Conneely further argued that Essential was attempting to obtain “double recovery” by claiming costs that had already been addressed in a previous adjudication decision involving another contractor.

Upon reviewing the request, the adjudicator denied Conneely’s application for disclosure of documents from the prior adjudication. He found the double recovery argument “fanciful,” as the materials Conneely sought predated the appearance of the defects at issue by several months and thus bore no relevance to the present dispute. The Court agreed with this reasoning, stating that the adjudicator had appropriately assessed the disclosure request's relevance and had granted Conneely ample opportunity to address the substantive issues in the adjudication, including causation and double recovery, despite dismissing the initial disclosure request as "fanciful" (paragraphs [12] – [15]). Conneely argued that this rejection signalled pre-judgment and bias, thus undermining the adjudicator’s impartiality and contravening natural justice.

Natural Justice and Bias Claims

In contesting the adjudicator’s decision, Conneely relied on the Helow v Secretary of State for the Home Department and Resolution Chemicals v Lundbeck tests for apparent bias, which ask whether a fair-minded observer would conclude that there was a real possibility of bias. Conneely argued that the adjudicator’s comment about the “fanciful” nature of the double recovery claim prematurely cast doubt on the merits of their defence, suggesting a lack of impartiality.

The TCC, however, stressed the importance of viewing such comments within the unique context of adjudication, a process designed to deliver “rough and ready justice” quickly. Unlike judicial proceedings, where extensive review and deliberation are standard, adjudicators often operate under tight time constraints and rely on concise evaluations to keep the process efficient. The Court also referenced Carillion Construction Ltd v Devonport Royal Dockyard Ltd, outlining that adjudication decisions should be summarily enforced unless there is a compelling case of a serious breach of natural justice that could materially alter the outcome (see paragraph [6(1)]).

Court Decision

The TCC evaluated Conneely’s claims and ultimately found them unsubstantiated, noting that:

• No prejudgment from adjudicator:

The adjudicator’s remarks did not represent a pre-judgment of any issue but were specific to the disclosure request’s relevance. His description of the double recovery claim as “fanciful” merely reflected his view of the disclosure’s lack of probative value, without implying a final stance on Conneely’s broader arguments. The Court confirmed that the adjudicator’s procedural comments were distinct from any final substantive conclusions and underscored that Conneely was afforded “every opportunity to pursue its substantive case” ([paragraphs [12] and [15]);

• No material impact on the outcome:

There was no material impact on the outcome. Even if the adjudicator’s comment could be viewed as overly dismissive, it did not influence the adjudication’s outcome. Conneely ultimately conceded that the double recovery claim had no substance after reviewing some of the disputed materials, negating any assertion that a breach of natural justice materially affected the final decision. This lack of material impact on the outcome was crucial in the Court’s decision to dismiss Conneely’s natural justice claim, as noted in paragraph 17 of the judgment; and

• Connelly's waiver of objection right:

By paying the adjudicator’s fees without reserving their right to challenge the natural justice argument, Conneely effectively waived their objection. Drawing from Platform Interior Solutions Ltd v ISG Construction Ltd, the Court observed that, while parties can raise valid objections to adjudicator conduct, they risk waiving such claims if they fail to do so explicitly before making payment. The Court found that Conneely’s payment without reservation demonstrated a waiver, and noted that Conneely had ample opportunity to preserve their objection prior to payment (paragraphs [21] – [24]).

Consequently, the TCC granted Essential summary judgment to enforce the adjudicator’s decision.

Practical Takeaways

There are a number of key practical takeaways from the case:

1. Natural Justice in Adjudication: Courts will enforce adjudication decisions promptly unless a serious breach of natural justice, materially affecting the outcome, is evident. Comments made in the course of procedural determinations are not usually sufficient to indicate bias, given the swift nature of adjudication;
2. Disclosure Requests in Adjudication: Parties should ensure that disclosure requests are well-founded, with clear relevance to the dispute at hand. Unsupported claims of “double recovery” or vague allegations may be dismissed, especially when they pertain to previous, unrelated adjudications; and
3. Implications of Fee Payment Without Objection: To preserve any challenge based on procedural fairness, parties should pay adjudicators’ fees while explicitly reserving their objections. This avoids any implication of waiver, which courts may interpret as an acceptance of the adjudicator’s conduct.

This judgment serves as a reminder of the TCC’s support for the integrity and efficiency of adjudication as a dispute resolution process, confirming the boundaries of adjudicator discretion and underscoring the importance of a swift, focused approach to natural justice claims in this context.