Adjudicator award enforced despite "without prejudice" reliance

A judge has allowed an adjudicator's award to be enforced despite the defenders claiming the award had been vitiated by the adjudicator relying on three letters from the defenders that were stated to be "without prejudice".

Lord Ericht in the Court of Session granted decree in an action by Transform Schools (North Lanarkshire) Ltd against two companies in the Balfour Beatty group, for enforcement of an adjudicator's award in a dispute arising out of works to various schools in North Lanarkshire.

The defenders objected that the adjudicator had relied on three letters offering to carry out various works "on a without prejudice basis or without admission of liability", in rejecting a plea of prescription. They argued that the letters were completely protected against use in the adjudication, and the adjudicator's approach offended against public policy, and amounted to a material error and breach of natural justice.

Lord Ericht emphasised that his decision concerned the "limited issue" of whether the court should enforce the adjudicator's decision. The final determination of the questions of prescription and admissibility of the letters were for a later stage of the action.

Considering the defenders' central argument, that based on natural justice, the adjudicator himself, an English barrister, had identified and raised the question of whether he could look at the letters, and then considered arguments of the parties before doing so. His approach was to look at the correspondence as a whole, including both prior and subsequent correspondence.

The judge held: "In my opinion the adjudicator was entitled to consider the question of whether the letters were admissible. He was entitled to consider the submissions which the parties had made to him in that regard. A court would be entitled to look at the 'without prejudice' documents and make a decision as to whether they were admissible. There is no reason why an adjudicator should not be entitled to do likewise. The adjudicator in this case may or may not have been right to decide they were admissible. But if he was wrong, then that was an error of law, and errors of law on the part of the adjudicator do not justify this court in refusing to enforce the adjudicator’s decision".

The court would still be entitled to refuse to enforce the decision if there had been a serious breach of natural justice, but given the procedure followed, "It cannot be said that the submission of the letters to the adjudicator, or the way in which he dealt with them, was in any way improper or involved any breach of natural justice or apparent bias."

Click here to view the opinion.

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