2) Natural justice – references to without prejudice materials – Transform Schools (North Lanarkshire) Ltd v Balfour Beatty Construction Ltd and Anor. [2020] CSOH 19 This case did not receive our attention when judgment was handed down in February 2020 and is now reviewed. The pursuers engaged the defenders for construction work in various schools known as the Stepps Project. The work was carried out in 2006 and 2007. In 2015 pursuers complained of drain blockages. In 2015 and 2017 surveys were conducted. In June 2019 a drain collapsed. From 2016 to 2018 the parties corresponded and defenders sent a number of letters in which they agreed to undertake specified remedial works on a “without prejudice” basis and “without admission of liability”. Some letter were actually headed “without prejudice” whereas others were not. They also carried out various remedial works. In July 2019 pursuers referred a claim for the cost of remedial works to adjudication. The adjudicator found for the pursuers and ordered the defenders to pay them £4,029,574. In reaching his decision he had regard to the correspondence in order to determine whether the claim had “prescribed” (that is to say had become statute barred under “the 1973 Act”[8]). The correspondence from 2016 – 2018 was referred to in witness statements and the parties’ submissions and put before the adjudicator.
He noticed that a number of communications were marked “without prejudice” and or contained offers of settlement by way of carrying out work on a without prejudice basis. Without further reading the affected documents, he asked the parties for permission to do so. Pursuers agreed; defenders objected. The adjudicator who was a barrister, decided that like a judge, he was entitled to consider the letters to determine if they were or were not privileged and if admissible, to take them into account in deciding whether the claim was prescribed. Taking them into account he decided: (i) that the carrying out of work under an express reservation as to liability did not amount to a relevant acknowledgement that would extend time under s 10(1)(b) of the 1973 Act, but (ii) that the contents of the correspondence had extended the prescriptive period under s6(4) of the 1973 Act.
Upon pursuer’s application to enforce the award, defenders raised the following challenges:
(1) The adjudicator had erred in considering the without prejudice communications the contents of which were privileged; (2) This was unfair and gave rise to unconscious bias and amounted to a breach of the rules of natural justice. Lord Ericht, giving judgment, said this was not a case where the adjudicator was improperly made aware of an irrelevant and collateral without prejudice offer to settle which he ought to put out of his mind. The admissibility of the letters was a question the adjudicator had to decide as one of the central issues in the case. It was a matter he himself identified and he gave both parties the opportunity to make submissions on the question. He considered the submissions, and the case law to which he was referred and gave a reasoned decision.
[8] Under the Prescription and Limitation (Scotland) Act 1973
Made with FlippingBook Online newsletter maker