A persuasive influence worth holding on to?

Scotland famously enjoys its own legal system, separate from that of the rest of the UK. Although in commercial law there may be little of major difference between decisions made under Scots law and those that might be reached in England, the principle of a separate and distinct legal system is important to the devolved nation, as it has been to Scotland since the Act of Union of 1707.

Now that full independence for Scotland, or at least another referendum on the subject, looks a greater possibility than it did even at the start of this year, commentators will be weighing up the gains and losses that independence would imply. One thing that would be lost would be the benefits gained from decisions being made in Scottish courts having an influence in England.
Decisions of Scottish courts can have great influence on courts throughout the UK, and a recent decision of the Inner House – Scotland’s Appeal Court – highlights the potential importance that these decisions can have.

The decision in Dickie & Moore Limited v Trustees of the Lauren McLeish Discretionary Trust held that a successful challenge to part of an adjudication decision does not necessarily prevent enforcement of other parts of the decision, even if only a single dispute was referred to adjudication.

Since statutory adjudication for construction disputes was introduced in 1998, the courts have strongly supported adjudicators’ decisions; only challenges to decisions involving breaches of natural justice or an adjudicator exceeding her/his jurisdiction have any chance of succeeding. Losing parties have been reduced to very close reading of adjudicator’s decisions in the usually forlorn hope of finding something that could be argued to represent a breach of natural justice, or jurisdictional infringement.
Finding anything untoward with any part of an adjudicator’s decision would mean that all parts of the decision could be unenforceable. So ‘good’ parts of a decision fall away along with a single ‘bad’ element.

This approach has now been rejected following this appeal upholding a decision of Lord Doherty in November last year, when he held that the dispute in respect of which the adjudicator had jurisdiction, and the dispute in respect of which it was found he did not, were separate disputes. So where an adjudicator’s decision was partly within and partly outwith jurisdiction, the part within jurisdiction could still be binding, meaning the ‘bad’ element could be severed and the ‘good’ could stand.

Lord Doherty also said that the critical question ought not to be whether there was a single dispute but whether there was a ‘core nucleus’ of the decision that could safely be enforced. This core nucleus would have to not have been ‘tainted’ by the decision and reasoning on the ‘bad’ and therefore unenforceable elements.

The Inner House has given Lord Doherty’s approach what has been hailed as a ringing endorsement and the decision is expected to lead to a reduction in challenges to enforcement of adjudicator’s decisions throughout the UK. The decision is a significant support for the adjudication regime and although is not binding elsewhere in the UK, as it comes from Scotland’s appeal court it is expected to be ‘persuasive’ – which means very good reasons would have to be found by challengers to adjudication decisions to persuade an court in England to ignore it.

Nick Barrett