At first sight, the question of when the adjudicator ceases to act might seem quite straightforward: the adjudicator can resign at any time; and the parties can agree to revoke the adjudicator’s appointment at any time. However, consider the following premise equivalent to the facts in Harding v Paice [2014]: a party refers a dispute, and the responding party raises a jurisdictional challenge; the referring party then seeks to revoke the appointment but the responding party refuses to agree to the revocation, all the while maintaining its jurisdictional challenge.

This chapter summarises the legal landscape surrounding an abandoned adjudication pursuant to the Scheme. However, there are several adjudication rules including NEC and TECSA that are not in line with the Scheme, namely omitting: paragraph 9 (resignation of the adjudicator) and paragraph 11 (revocation of adjudicator’s appointment). The author postulates that equivalent provisions are nevertheless implied by common law.

Resignation Guidance

As a brief summary of the legislative framework around resignation, there are three germane parts in the Scheme 2011 describing the rights and obligations of the adjudicator:

Given those express obligations, there is a substantial vacuum on when an adjudicator might consider resignation. This void has largely been untangled in legal proceedings related to both jurisdictional and natural justice issues where the adjudicator chose not to resign. Essentially, those unenforceable decisions due a lack of jurisdiction / apparent bias followed a missed opportunity to resign. That said, on occasion the adjudicator might not have knowledge of the issue, or there might be a novel issue, and therefore the adjudicator should push forward.

The expedited adjudication procedure is the major constraint on the adjudicator. If the adjudicator gets 28 days into an adjudication and cannot agree an extension of time, then she must resign (Balfour Beatty v London Borough of Lambeth [2002]). The adjudicator should be proactive to prevent this from happening for want of it being detrimental to the legitimacy of the procedure. This might include putting pressure on the parties early on and proclaiming that without an agreed extension of time it will be necessary to resign.

By and large, the responding party will raise a jurisdictional challenge if there is a real issue. However, the adjudicator must be careful not to put her head in the sand when discovering a clear and obvious issue, thereby striking at the heart of an efficient system (Steve Ward Services v Davies & Davies Associates [2022] EWCA).

Revocation Guidance

Revocation under the Scheme is governed by paragraph 11(1) which states: “The parties to a dispute may at any time agree to revoke the appointment of the adjudicator“. Even in the absence of a corpus of black-letter law, that is rather unambiguous. The responding party would not derail the process by refusing to take part and there is no express right for the referring party to abandon the adjudication after serving the referral.

However, in Jacobs v Skanska [2017] O’Farrell J confirmed the common law right that the referring party is entitled to unilaterally withdraw after submitting a referral notice. Furthermore, O’Farrell J confirmed the referring party is entitled to adjudicate that same dispute at a later stage (this point is dealt with further in the chapter ‘S is for Substantially the Same’).

Adjudicator’s Fees

The legislation is more precise on the determination of adjudicator’s fees. Under the Act section 108A the adjudicator is entitled to allocate her fees between the parties unless, in the rare event, there is a subsequent agreement between the parties after the giving of the notice of adjudication.

On resignation, the Scheme p9(4) states the adjudicator is entitled to reasonable fees and expense incurred following resignation due to either: a dispute already decided; or a dispute which varies from that in the notice and which she does not feel competent to decide. In each event, both parties are jointly and severally liable.

Where these two scenarios do not occur, the adjudicator has no statutory or common law entitlement to fees. In reality, it is possible that the adjudicator’s terms and conditions expand the right to fees to include the adjudicator resignation for jurisdictional and natural justice issues (PC Harrington Contractors Ltd v Systech [2012] EWCA).

For a revoked appointment, under paragraph 11, the adjudicator shall be entitled to reasonable fees and expenses incurred and both parties are jointly and severally liable. However, should the revocation be due to default or misconduct on the part of the adjudicator then there is no entitlement to fee. There is little by way of case law pertaining to this part.

Finally, the Scheme states in p26 that the adjudicator shall not be liable for any act or omission unless that act was done in bad faith. A definition of bad faith can be found in Pakistan International Airline Corp v Times Travel [2021] UKSC. For there to exist an act of bad faith, there will typically have to be a level of dishonesty or unconscionability. Although not tested in adjudication enforcement proceedings, that might be a useful yardstick for practitioners.

Conclusion

This article has covered the legal landscape thoroughly and briefly touched on some practical considerations. In summary, with the exception of an act of bad faith and dependent on the adjudicator’s terms, it is possible there is an unfettered entitlement to fees. However, that proposition has no regard for any ethical considerations a discerning adjudicator might have following resignation.

King Minos of Crete refused to sacrifice his fairest bull to the Gods and so a curse was placed on his beloved’s head. Equally, a missed opportunity to resign following a valid jurisdictional challenge – financially motivated or otherwise – will likely be punished by the Courts. Ultimately, a pyrrhic victory is inauspicious and, at times, adjudicators have a duty to make sacrifices.