This article is all about Lord Menzies and Adjudication. Lord Menzies is a name that you will see popping up in Adjudication cases from time to time. He was a Supreme Court Judge in Scotland and as such made judgements on various adjudication cases which are interesting to us.
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We support legal representation in more complex cases but we want to encourage especially smaller companies to feel more confident fighting for their contractual rights.
Lord Menzies is a name that you will see popping up in Adjudication cases from time to time. He was a Supreme Court Judge in Scotland and as such made judgements on various adjudication cases.
His full name is Duncan Adam Young Menzies.
He was a judge of the Supreme Court of Scotland.
His education included the independent Cargilfield Preparatory School in Edinburgh, Glenalmond College, Perthshire, the School of Law of the University of Edinburgh (LLB)., Wadham College, University of Oxford (MA),
He qualified as a barrister in 1991(AKA took silk, appointed member of queens counsel) and became a supreme court judge in Scotland in 2001 becoming ‘Lord Menzies’.
The Adjudicator called a friend and asked for his opinion on a contract clause.
Lord Menzies held that the adjudicator had breached the rules of natural justice by calling a friend and asking for advice on a contractual clause. He did not tell anyone that he did this.
This essentially invalidated the decision of the Adjudication and allowed it to be reviewed.
The lesson here is to tell both parties that you are going to seek advice and get them to agree to this.
This case considered the concept of ‘Tolent Clauses’. A tolent clause is a clause inserted into a contract that states the referring party in an adjudication must pay all costs associated with the adjudication.
Lord Menzies ruled that Section 108A of the Construction Act permitted Tolent clauses in certain circumstances. For example, for a tolent clause to be permitted there must be reciprocity. So both parties must be liable to pay the costs if that party refers to adjudication. In Yuanda only the contractor was to be responsible for the costs whoever referred the dispute. Also, there must be a limit to how much the adjudication will cost, it cannot be an unlimited amount. In Yuanda there was no limit even if the costs were completely unreasonable. In Profile there was a provision for assessing the costs as fair or not.
Lord Menzies felt that a tolent clause would not stand in the way of a party referring a dispute to adjudication (their statutory right) as there would always be some cost to an adjudication regardless.
For the record, we don’t agree with this. Imagine a small contractor being owed £10,000 by a Client and knowing that an adjudication cost of £20,000 will have to be borne by him to get his £10,000. Its completely unfair and stops access to a statutory right. It essentially like an excess amount in an insurance claim. If an insurance excess is £500 then no sane person will make a claim for £400. It gives rogue Clients an opportunity to cut down final payments to their contractor knowing they will not refer to adjudication. This is not what Parliament intended when they made the amendments to the construction act in 2011.