Wednesbury principles in adjudication
8 January 2013
In one of the final issued opinions of last year, Lord Hodge decided the case of SW Global -v- Morris & Spottiswood, (Lord Hodge  CSOH 200). The case concerned the refusal by a main contractor to comply with an award made by an adjudicator in favour of its sub-contractor. The sub-contractor raised an enforcement action for payment. The action was resisted on a panoply of grounds ranging from natural justice, bias, failure to exhaust jurisdiction and, most interestingly, Wednesbury unreasonableness. Senior Counsel for the defender attempted to introduce, into Scots construction law, the concept that internal inconsistencies in an adjudicator's reasoning vitiated his decision. The pursuer argued that, if Wednesbury principles applied to Scottish adjudicators at all, in a system where the courts have consistently held that adjudicator's decisions must be enforced regardless of errors of fact and law, more was needed than mere internal inconsistency. Lord Hodge accepted that submission and granted decree de plano. He stated "In my view in the context of adjudications, where the adjudicator is asked to make interim decisions under tight time constraints, the Wednesbury ground of review will be applied, if at all, only where the mistake has the hallmarks of irrationality of which Lord Diplock spoke in CCSU v Minister for the Civil Service  1 AC 374, at 410.
So, if Wednesbury applies at all, the court will only interfere where the irrationality is "outrageous in its defiance of logic or accepted moral standards".
This will be a welcome decision for adjudicators who's decisions have recently been subjected to more and more attack on these types of ground. It remains unclear whether Wednesbury applies at all, but if it does, its application will be limited by the high threshold applied by Lord Hodge.
Gavin Walker of Axiom Advocates represented the successful pursuer.
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