Skip to Main Content
Lawyers in Edinburgh
Solicitors in Edinburgh
Family Solicitors/Lawyers in Edinburgh

Latest news and insights

Be prepared for the unexpected by setting up a Power of Attorney

Protect your future and your loved ones by understanding the importance of a Power of Attorney.

How to navigate divorce or separation in 2025

Discover what to consider when preparing for divorce, including legal requirements, emotional readiness, timing, finances, and seeking professional support.

Building Fair Terms: The Costly Consequences of Unfair Contract Terms

The recent case of Michael Glaser KC, Victoria Miller v Katharine Jane Atay highlights the importance of fair contract terms for consumers

You’ve got mail… and the adjudicator was right to make you accept it.

Published: 24 October 2024
Time to read: 5 mins

Women using smartphones check email notifications inbox have spam viruses message with warning caution, junk and trash mail, security terms cybersecurity concept

In the recent case of ATG Services (Scotland) Limited v Ogilvie Construction Limited [2024] CSOH 94, Lord Sandison confirmed that the law surrounding claimed breaches of natural justice by adjudicators is well-established and “not open to serious doubt”.

His judgement serves as a reminder that the court should not be used as a general appeal tribunal for adjudicator’s decisions, and that judicial intervention ought to be discouraged as this only adds delay to what was designed to be a quick process for resolving disputes in the construction industry on an interim basis.

 

The Facts  

An adjudicator was appointed to resolve a dispute in connection with an interim payment application made by a subcontractor to a contractor, for payment of a sum claimed to be due.

At a pre-contract meeting, it was agreed between the contractor and subcontractor that applications for payment had to be submitted to the contractor via two specific email addresses. Meanwhile, the sub-contract maintained that required notices had to be served by first class recorded post to a specified address. The interim payment application in this case was sent as an email attachment to a different email address. This email address was still associated with the contractor and so it did not attempt to argue that it had not received the email with the payment application.

The contractor maintained that this noncontractual method of service made the application for payment invalid. The subcontractor countered this by arguing that the application for payment was nonetheless valid due to the course of conduct adopted by the parties, pointing to the judgment of Carr J in Jawaby Property Investment Ltd v Interiors Group Ltd [2016] EWHC 557 (TCC). In summary, the subcontractor argued – ‘you’ve accepted noncontractual methods of service before, and so you should again now’. The adjudicator decided that the application had been validly issued, favouring the subcontractor’s position and awarding it a sum exceeding £1 million. The contractor declined to pay up, maintaining that the adjudicator materially breached the rules of natural justice.

 

The Arguments  

The contractor advanced two related lines of argument. Firstly, the contractor argued that Jawaby was an English law case and the adjudicator had been wrong to apply a foreign law where he had been told that Scots law was applicable. Similarly, the contractor said that neither party had offered the adjudicator an analogous Scots law principle on which he could rely, and therefore the adjudicator had gone off on a frolic of his own. Secondly,  the contractor claimed that the adjudicator had failed to adequately explain his reasoning behind why the contractor’s ‘no-basis in Scots law’ argument had failed, and as a result the contractor had been prejudiced.

The subcontractor advanced four main lines of argument. Firstly, the subcontractor argued that the adjudicator had clearly addressed the contractor’s line of argument and, at any rate, whether the adjudicator’s decision was correct in law or fact did not matter. Secondly,  the adjudicator could not be said to have ‘gone off on a frolic of his own’ as the subcontractor had made submissions about the very issue that the adjudicator was passing comment on. Thirdly, the adjudicator was not bound to address every argument presented to him in his decision. Even if a specific argument was not addressed in his decision, this alone did not mean that the adjudicator had omitted to consider this issue. Fourthly, the contractor failed to positively argue that Jawaby did not (and could not) represent the law in Scotland.

 

The Decision

Lord Sandison began his commentary with the candid remark: “The defence to this action is entirely without merit”. He noted that the law in this area is well-established and said that it was “perhaps unfortunate” that the sheer number of cases regarding the principles of natural justice and adjudicators’ decisions brought  to court over the last 20 years has made it appear as though there is scope for serious doubt – where, he says, there is not.

Lord Sandison rejected the contractor’s first argument  and confirmed that both parties had clearly accepted that the means by which the interim payment application was served was a principal issue in the adjudication. While the subcontractor took the opportunity to advance their argument with reference to Jawaby, the contractor failed to properly respond to this. The contractor simply submitted that the subcontractor had not provided any basis in Scots law to support their course of conduct argument, without ever positively arguing that Jawaby did not exemplify a recognised Scots law principle. In any event, Lord Sandison took the view that the adjudicator did not feel bound to follow Jawaby and instead that he simply found this case to be an interesting example of an analogous set of circumstances, as the adjudicator had asserted that his decision was simply “in line with the findings in Jawaby”.

Lord Sandison also quickly discounted the contractor’s second line of argument. He remarked that adjudicators are not required to respond to every question, statement or claim in their decision. He also noted that “any reasonable reader” would be able to understand the adjudicator’s rationale in the present dispute as he had, in fact, exceeded the degree of explanation required.

As a final remark, Lord Sandison observed that a complaint claiming an adjudicator has breached the requirements of natural justice should not be made lightly as it casts doubt on their professionalism and competence, which he said had been done, “in this case without the slightest warrant”.

Go Back

SUBSCRIBE

To receive regular updates like this one, you can sign up to our bulletins, and we will provide updates on the issues that matter to you.

SUBSCRIBE NOW

Get in touch

Contact us to find out how we can help you.

Get in touch

Lawyers in Edinburgh
Solicitors in Edinburgh
Family Solicitors/Lawyers in Edinburgh

Find a lawyer

If you are looking for a specific member of our team, you can search for them by their name here. You can also search for your regular contact by their area of expertise using the buttons below.

Visit the ‘Our People’ page for more ways to search if you can’t find who you’re looking for.