Lanes Group Plc v Galliford Try Infrastructure Ltd (t/a Galliford Try Rail)

A party does not permanently lose its statutory or contractual right to adjudicate a construction dispute merely because an earlier adjudication was allowed to lapse before referral. An adjudicator acquires powers only upon referral, and an abortive adjudication may be restarted.

An adjudicator may disclose provisional conclusions to focus the parties’ submissions. Apparent bias or pre-determination arises only where a fair-minded and informed observer would conclude that there was a real possibility of bias. The court must distinguish a premature final decision from a provisional view genuinely open to correction. Given adjudication’s speedy, interim character, courts should invalidate decisions for breach of natural justice only where the complaint is clearly established.

Lanes Group Plc subcontracted to Galliford Try Infrastructure Ltd to undertake roofing works at a railway depot. After the subcontract was terminated, disputes concerning delay, termination and substantial cross-claims proceeded to arbitration. Galliford also sought an interim adjudication award.

Galliford allowed its first adjudication to lapse by withholding the referral documents after an adjudicator had been appointed. It then served a fresh notice, and a second adjudicator awarded it more than £1.3 million. Before deciding, the adjudicator circulated preliminary views and invited both parties to respond.

Akenhead J and Waksman QC, sitting as a deputy High Court judge, held that the second adjudicator had jurisdiction. Waksman QC nevertheless declined enforcement because the preliminary views created an appearance of pre-determination. The conjoined appeals concerned jurisdiction and apparent bias.

1. Disposition. Per Jackson LJ, with whom Stanley Burnton and Richards LJJ agreed, Galliford’s appeal was allowed on apparent bias and Lanes’ appeals were dismissed. The second adjudicator had jurisdiction, his decision was enforceable, and Galliford was entitled to summary judgment for the sums awarded with appropriate interest.
2. A party’s failure to pursue an adjudication after serving its notice and obtaining an appointment does not extinguish its right to adjudicate that dispute. Neither section 108 of the Housing Grants, Construction and Regeneration Act 1996, the Scheme nor the contract supported the proposed restriction. A term limiting recommencement to cases where the earlier failure was neither deliberate nor without good reason could not be implied. Such a restriction would also require costly factual inquiries inconsistent with adjudication.
3. Adjudication is a sui generis procedure. An adjudication notice and an appointment do not themselves confer powers on the adjudicator; a subsequent referral is required. Contractual and statutory adjudication machinery recognises recommencement in several circumstances, and practical events may make an initial adjudication abortive. Galliford’s abandonment of the first appointment was therefore permissible, notwithstanding the unattractiveness of forum shopping. Abuse of process has no place in adjudication.
4. The applicable question was whether a fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias or pre-determination. Such an observer knows the relevant publicly available facts, is neither complacent nor unduly suspicious, and can distinguish relevant from irrelevant matters and assign proper weight to them.
5. The adjudicator’s preliminary document used language resembling final findings, but both the document and its covering communication expressly stated that the conclusions were provisional and invited further evidence and argument. A decision-maker may disclose a provisional view to expose possible errors and focus submissions. This differs from reaching a final conclusion before receiving all material which the parties wish to provide. The informed observer would regard the document as provisional, so apparent bias or pre-determination was not established.
6. Adjudication is rapid, procedurally flexible and only temporarily binding. Courts should therefore be reluctant to invalidate an adjudication decision for breach of natural justice or similar grounds unless the complaint is clearly made out.

1. Court of Appeal (Civil Division): Galliford’s appeal on apparent bias was allowed. Lanes’ appeals on jurisdiction were dismissed. The adjudication decision was held enforceable.
2. Technology and Construction Court, Waksman QC: The jurisdiction challenge was dismissed, but the adjudicator’s decision was declared a nullity for apparent bias and Galliford’s enforcement claim was dismissed.
3. Technology and Construction Court, Akenhead J: Lanes’ application to restrain the second adjudication was rejected. The statutory entitlement to adjudicate could not be defeated through the alleged repudiation of the adjudication provisions.