This article summarises the Court of Appeal judgment in Lanes Group PLC v Galliford Try Infrastructure Limited [2011] EWCA Civ 1617. This case revolved around an adjudicator’s decision made in favour of Galliford and the TCC refusing to grant summary judgment on the grounds of apparent bias. Specifically: (i) Lanes challenged whether the second appointed adjudicator had the legal authority to conduct the adjudication after a previous adjudicator was appointed but the referral was not submitted; and (ii) Galliford challenged whether the decision was invalid due to the appearance of bias and pre-determination, stemming from the issuance of a Preliminary View before receiving Lanes’ substantive submissions.

Background to Dispute

Lanes was a subcontractor to Galliford for roof renewal works at a train maintenance depot in Inverness. The subcontract incorporated the Civil Engineering Contractors Association’s Blue Form of sub-contract terms. A dispute arose regarding delays, variations, and the eventual termination of Lanes’ employment by Galliford in April 2009.

Galliford served an adjudication notice in March 2011 and the ICE appointed Mr. Klein as the adjudicator. However, Galliford’s solicitors, believing that Mr. Klein was biased, failed to send the referral documents, effectively allowing this first adjudication to lapse. Galliford then served a fresh adjudication notice, and the ICE appointed Mr. Atkinson.

Lanes argued that Mr. Atkinson lacked jurisdiction, claiming that the failure to proceed with the first adjudication meant the dispute could not be referred to adjudication again. Lanes unsuccessfully sought an injunction to prevent the second adjudication.

After Lanes failed to submit its response by the initial deadline, the adjudicator issued a document titled Preliminary Views and Findings of Fact, outlining his provisional conclusions. He invited further submissions on this view. In due course both parties submitted their comments and submissions in relation to the Preliminary View.  Mr. Atkinson considered the material before him and on 17 May 2011 he issued his decision in favour of Galliford.

At proceedings in the TCC, Lanes challenged the validity of the adjudicator’s appointment and decision. Judge Waksman QC dismissed Lanes’ jurisdictional challenge but found that Mr. Atkinson’s decision was a nullity due to apparent bias arising from the Preliminary View.

Jurisdiction of the Adjudicator

The appellate court stated that the right to adjudicate a construction dispute is a statutory right under Section 108 of the Housing Grants, Construction and Regeneration Act 1996. Lord Justice Jackson stated, “A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.”

The Court of Appeal affirmed the holding of the lower court and rejected Lanes’ argument that Galliford’s failure to pursue the first adjudication constituted a repudiatory breach or a forfeiture of their right to adjudicate the same dispute again. The court recognised that adjudications can be aborted for various reasons (e.g., postal delays in serving referral documents) and it would be unreasonable to imply a term that the right to adjudicate is irretrievably lost in such circumstances. Further, the court cited Connex South Eastern Ltd v MJ Building Services Group plc to confirm that the concept of “abuse of process” generally has no place in the context of adjudication.

Apparent Bias of the Adjudicator

The court reiterated the established test for apparent bias as formulated in Porter v McGill: “The question is whether the fair minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.” The judgment elaborated on the characteristics of this ‘observer’, drawing from Gillies v Secretary of State for Work and Pensions and stating that the observer is assumed to have access to all publicly available facts, is neither complacent nor unduly sensitive, and can distinguish between relevant and irrelevant information.

The court drew a crucial distinction between reaching a final decision prematurely (unacceptable) and issuing a provisional view to facilitate the process and allow parties to address potential misunderstandings. The court disagreed with the finding of apparent bias in the TCC. Lord Justice Jackson emphasised the importance of the accompanying notices and emails, which clearly stated that the Preliminary View was provisional and intended to assist the parties. The notice itself stated: “The statement ‘I find’, ‘I find and hold’ and ‘Decision’ and other similar statements are not and not intended to be decisions of the adjudicator but preliminary views and findings of fact preparatory to the decision.”

Implications of the Judgment

This judgment reinforces the broad scope of the statutory right to adjudication under the Act and suggests that a failure to pursue a particular adjudication does not necessarily extinguish the right to refer the same dispute to adjudication again.

The court highlighted that adjudication is a “rough and ready process carried out at great speed.” Adjudicators often need to assimilate large amounts of information quickly and fashion their own procedures and, therefore, courts are reluctant to strike down adjudication decisions for breach of natural justice unless the case is clearly made out.

Finally, the case provides important guidance on the use of preliminary views by adjudicators. While the language used must be carefully framed to avoid the appearance of pre-determination, the issuance of provisional views for the purpose of clarifying issues and inviting further submissions is not inherently biased.