The Apparent Growth of Bias

sliwinskiIt has always been the case that actual or apparent bias by an adjudicator will render the adjudicator’s decision liable to be quashed on the grounds of natural justice. In the early days of adjudication, cases in which bias was as established were rather rare, but it seems that the their numbers are growing, as illustrated by the recent English case of Paice & Anor v MJ Harding (t/a MJ Harding Contractors) [2015] EWHC 661 (TCC). The case is interesting because it exemplifies how apparent bias can arise from the actions, not of the adjudicator himself, but of his support staff.

There was a complex history to this particular adjudication, which was the 4th adjudication between the parties arising out of a contract for the construction of 2 houses. The adjudicator was Robert Sliwinski, an experienced chartered surveyor. He had been the adjudicator in the 1st and 2nd adjudications, in both of which he had ordered the claimant owners to pay money to the defendant builder.

The apparent bias arose out of a couple of telephone conversations that took place between the claimant owners and Mr Sliwinski’s wife, who was also his office manager. Quite how the defendant builder found out about these conversations is not clear, but at an early stage in the 4th adjudication the defendants sent Mr Sliwinski in email asking what contact he had had with the claimants and, in respect of any oral communications, asking when they had spoken, for how long and what about. Mr Sliwinski replied

I can confirm that I have had no contact with Mr Paice or Ms Springall at all, save in relation to the previous adjudications when I had contact with their representative for the purpose of those adjudications.

Not satisfied with that answer, the defendants asked Mr Sliwinski to provide his telephone records, but Mr Sliwinski refused that request. Instead, Mr Sliwinski went on to issue his decision, requiring the defendant to pay £325,484 together with fees of £15,487.50.

The defendant then somehow obtained an anonymous letter enclosing 2 pages of the claimants’ phone bill, which revealed the existence of 2 lengthy telephone conversations which had taken place before the 4th adjudication commenced. It was suggested by the claimants that these telephone records had been obtained by some sort of fraud, in which someone had contacted British Telecom pretending to be the claimant in order to obtain access to his telephone records. The judgment however sheds no light on how these telephone records were obtained.

Mr Sliwinski’s wife gave some evidence about these telephone calls. There was much complaining, it seems, from the claimants about the 1st and 2nd adjudications, and Mr Sliwinski’s wife provided an outline of how the process would work for a 4th adjudication launched by the claimants themselves, whereby the claimants might recoup money that they had been ordered to pay. She was asked to suggest some names as to advisers who might be able to help the claimants, and having spoken to Mr Sliwinski, she had passed on to the claimants Mr Sliwinski’s suggestion of 8 firms (5 solicitors and 3 claims consultants). The court made some findings of fact, in particular that the lengthy telephone calls in question were between the claimants and Mr Sliwinski’s wife, not Mr Sliwinski himself. No detailed file note was made of them, as it should have been, and the court described the accounts of the conversations as “at best sketchy”.

Mr Justice Coulson found that Mr Sliwinski’s determination was infected by apparent bias. First, he found that Mr Sliwinski should have written to the parties, disclosing the conversations, and asking if either of them had any objections to him continuing to act as adjudicator. Secondly, he found apparent bias on an alternative ground, namely Mr Sliwinski’s email denying any relevant contact. Justice Coulson said

44           …a fair-minded observer would not regard it as appropriate for a decision-maker to hide behind the syntax of a letter, written by a layman, and say that, since the question only referred to ‘you’, he did not need to refer to the conversations with his practice manager/wife, even though their content was subsequently outlined to him. A fair-minded observer might think that such sophistry was worthy of a politician, and would not mean that as a compliment.

45.Thus I consider that a fair-minded observer would consider that the unequivocal denial, in the face of a specific request, in a situation which, at the very least, the adjudicator knew to be more nuanced than he was representing, was a further factor to be taken into account, and a further factor that would support in the mind of the fair-minded observer, the real possibility of bias.

The relevant principles as to what is and is not acceptable in this context are probably much the same in the UK and in Australia. In Makers UK Ltd v London Borough of Camden [2008] EWHC 1836 (TCC), Akenhead J said at paragraph 37:

“This case has thrown up a number of points upon which it may be helpful if some guidance is given which might be of practical help to people and parties involved in the adjudication process under the HGCRA : ”

(1) It is better for all concerned if parties limit their unilateral contacts with adjudicators both before, during and after an adjudication; the same goes for adjudicators having unilateral contact with individual parties. It can be misconstrued by the losing party, even if entirely innocent.

(2) If any such contact, it is felt, has to be made, it is better if done in writing so that there is a full record of the communication.

(3) Nominating institutions might sensibly consider their rules as to nominations and as to whether they do or do not welcome or accept suggestions from one or more parties as to the attributes or even identities of the person to be nominated by the institutions. If it is to be permitted in any given circumstances, the institutions might wish to consider whether notice of the suggestions must be given to the other party.”

In the UK, the practice is that the nominating bodies (ANBs as they are called) do the job of nominating the adjudicator, and then bow out of the picture. The adjudication process itself is administered by the adjudicator. There is no practice equivalent to that which frequently operates in Australia, in which the ANA interposes itself in communications between the parties and the adjudicator, and is also openly in the business of giving advice to potential claimants, before the adjudication is commenced, as to the adjudication process. It is not obvious that there is any real distinction between the role played by Mr Sliwinski’s wife in this case, and the role that is typically played by an ANA in Australia. It might well be that this case would provide some support for the proposition that, to avoid apparent bias, it is incumbent on an adjudicator in Australia to make full disclosure to both parties of any previous communications there have been between the ANA and the claimant.

Would it be open for an adjudicator in the circumstances to draw a line at the commencement of the adjudication, so as to treat any advice given before the adjudication was commenced as outside the scope of this consideration? It seems not. This was argued by the claimants in this case that the relevant conversations had taken place well before the adjudication had commenced, but Justice Coulson found that this was immaterial:

36. In addition, Mr Pimlott argued that the conversation was not disclosable because it took place two months before the adjudication. That argument, too, is unsustainable. What matters is not what the timing was, but what the conversation was about. I have found that the conversation was, amongst other things, about the very same claim, that is to say the final account claim, which Mr Sliwinski was just about to adjudicate upon. The fact that there was a two month gap between the conversations and the adjudication was immaterial.

That the conduct of an ANA can give rise to finding of apparent bias in Australia was established in Built Environs Pty Ltd V Tali Engineering Pty Ltd & Ors [2013] SASC 84 (3 June 2013) (see note). The Paige case suggests that there might well be scope for further challenges on this ground.

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