Introduction

Natural justice concerns may arise where an adjudicator uses their own knowledge without giving the parties an opportunity to comment. The recent case of Clegg Food Projects Limited v Prestige Car Direct Properties Limited [2025] EWHC 2173 (TCC) deals with this issue and gives important guidance. In Clegg Foods, the court considered the adjudicator’s use of ‘fair and reasonable rates,’ which were not canvassed by the parties.The judgment sets out a useful summary of the relevant case law in relation to an adjudicator using their own knowledge.

Prestige Car Direct Properties Limited (defendant) contracted with Clegg Food Projects Limited (claimant) under an amended JCT Design and Build Contract for the construction of a leisure and retail centre.

A dispute arose between the parties, regarding the assessment of a payment application. The referral to adjudication included a request for several declarations, including that the gross valuation of the payment application or ‘such other sum as the adjudicator may decide.’

The adjudicator found that the defendant had undervalued the sum due to the claimant and decided that an amount was due and payable to the claimant. The adjudicator used their own knowledge to determine ‘fair and reasonable’ rates for variations without further party input. The rates used by the adjudicator were within the range of figures submitted by both parties.

Enforcement

The defendant did not comply with the adjudicator’s decision for want of natural justice. The defendant claimed that the ‘fair and reasonable rates’ applied by the adjudicator were used without consultation with the parties, thus depriving them of an opportunity to comment. The court rejected the defendant’s arguments, holding that theadjudicator’s decision was enforceable.  

The court referred to several judgments and noted the following principles can be derived in relation to an adjudicator using their own knowledge:

‘11 The principles to be derived from those cases are:

…

(d) In respect of breach, Coulson J (as he then was) in Primus Build Limited v Pompey Centre Limited stated in respect of the failure of an adjudicator to go back to the parties:

“39. … It is a fine line for an adjudicator between wanting to help the parties on the one hand, and making one side’s case for them, on the other. But if an adjudicator believes that, in the interests of justice, there is a legitimate alternative course which has not been considered or put forward by the referring party, but which may, on its face, meet the objections of the responding party, he should immediately ask himself the question: do I need to give notice of, and obtain submissions about, that alternative approach?

40. As I have said, these things are always a matter of fact and degree. An adjudicator cannot, and is not required to, consult the parties on every element of his thinking leading up to a decision, even if some elements of his reasoning may be derived from, rather than expressly set out in, the parties’ submissions. But where, as here, an adjudicator considers that the referring party’s claims as made cannot be sustained, yet he himself identifies a possible alternative way in which a claim of some sort could be advanced, he will normally be obliged to raise that point with the parties in advance of his decision.”

(e) Whether or not there has been a breach of natural justice is exquisitely fact sensitive in the majority of cases. If an adjudicator intends to determine a point on the basis of material which has not been put before him by the parties, he must give them an opportunity to make submissions. However, he can reach a decision on the material before him on a basis for which neither party has contended if the parties are aware of the relevant material and the issues have been fairly canvassed before the adjudicator.

(f) If issues have been fairly canvassed before an adjudicator, or if the adjudicator has simply adopted an intermediate position, fairness does not require the parties to be given an opportunity to make further submissions. An adjudicator is obliged to make a decision and come to conclusions based on the evidence of each party, his analysis of it and of the submissions put to him. He is not under an obligation to invite comments on his conclusions reached after that process.

(g) Any breach of natural justice must be “serious” or “of considerable potential importance to the outcome” before an adjudicator’s decision is compromised.

(h) In Carillion v Devonport, the Court of Appeal quoted and approved the principle set out by Jackson J (as he then was) about the need for an adjudicator to seek further submissions: “it is often not practicable for an adjudicator to put to the parties his provisional calculations for comment. Very often those provisional conclusions will represent some intermediate position, for which neither party was contending. It will only be in an exceptional case such as Balfour Beatty v London Borough of Lambeth that an adjudicator’s failure to put his provisional conclusions to the parties will constitute such a serious breach of the rules of natural justice that the court will decline to enforce his decision.”

(i) An adjudicator can decide to crudely split the difference without further consultation with the parties. In Arcadis, Akenhead J held at paragraph 37: “…The fact that he was persuaded that the proper answer lay between the two adjusted forecast figures and that he happened to split it down the middle can not be considered to be a breach of the rules of natural justice. Whilst of course it is arguable that he was factually wrong, that does not impact on the enforceability of its decision.”

(j) In respect of summary judgment, in Corebuild Limited v Cleaver, Mr Adam Constable QC sitting as a Deputy High Court Judge set out at paragraph 26: “There may be circumstances in which it is possible to demonstrate on  summary judgment that the answer the adjudicator arrived at was so obviously  correct, that the failure to have allowed the point to be properly ventilated is not  material: permitting a party to make submissions could not have changed the outcome.  However, generally, it is sufficient for a party to show that the substance of the point with which they were deprived of the opportunity to engage with was properly arguable i.e. it had reasonable prospects of success.  Beyond that, the Court should not determine the merits of the point itself on the summary judgment application.‘

The court concluded that:

‘43 In my judgment, the decisions taken by the adjudicator, in respect of some of the Relevant Changes, to use a rate which he considered to be “fair and reasonable” was acceptable. I do not accept that it is a breach of natural justice for the adjudicator to fail to seek further submissions when coming to a decision after considering the materials provided by the parties and then determining that the appropriate rate is the within the range contended for by the parties … he provided a valuation within the range contended for by the parties, or which was more beneficial to the Defendant. I do not accept that it was necessary for the adjudicator to set out the details of the methodology used by him to come to his decision.

50 In my judgment, there is a further difficulty with the approach argued for by the Defendant. At what point does a variation by an adjudicator from the Claimant’s rate, the Defendant’s rate or a broad “split the difference” rate require consultation? Does any deviation at all from the unobjectionable rates require consultation? I would expect any party to answer “of course not” to that question.‘

Conclusions

Although a body of case law is developing in Ireland in relation to adjudication enforcement it does not deal with an adjudicator using their own knowledge. Consequently, it will be interesting to see whether the Irish Courts will use Clegg Foods in relation to this topic. In Clegg Foods, the adjudicator used rates, which were broadly between the parties’ rates. If the adjudicator used rates outside the rate range presented by the parties, a question arises as to whether the adjudicator should revert to the parties for comment before reaching the decision? Again, it will be interesting to see how the Irish Court would deal with this.