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Case Law – if the Contract Administrator is not acting impartially

Posted on September 1, 2021September 1, 2021

The Engineer/Architect/Contract Administrator is not acting impartially if he allows the employer to interfere with his independent judgment when issuing certificates.

In the traditional method, the employer first selects a suitably qualified Engineer / Architect to prepare designs and to do all other pre-contract activities needed for the project. Normally, it is done long before the selection of the contractor. He is paid under a separate contract with the employer. He is considered as the employer’s agent for the project.

But, when carrying out other tasks as the contract administrator, for example, when certifying payments or recommending time extensions, during the post-contract period, their actions must be impartial and fair between the employer and the contractor. They are required to make impartial decisions in these circumstances.

These dual roles sometimes may end up giving rise to difficult situations. 

It is well established that if the employer applies pressure on the contract administrator when carrying out his tasks resulting in the administrator’s judgments being influenced, his decision may be held invalid and set aside. A failure to act or certify payments independently by the contract administrator may result in disqualification.

Hickman & Co v Roberts (1913)

In Hickman & Co. v Roberts (1913), the contract had the provision that the decision of the architect as to payment due to the contractor was to be final. It also mentioned that the architect’s certificate is needed for any payment to be made to the contractor. 

The employer crossed the line and refused to allow the certificate to be issued by the contract administrator. 

The contractor requested that he was owed certain sums but the architect had failed to issue a payment certificate in his favour. When challenged by the contractor the architect openly admitted to the contractor that the employer would not allow him to issue a certificate. It clearly showed that the architect’s impartiality had been seriously compromised. 

The architect replied that his clients, the owners, would not allow it: 

“Had you better call and see my clients, because in the face of their instructions to me I cannot issue a certificate, whatever my own private opinion in the matter.”

The House of Lords held that the contract administrator had improperly allowed the owners to influence him: the owners could not rely on the absence of a certificate as a reason not to pay the contractor. 

Therefore, the Engineer / Architect / Contract Administrator should exercise his judgment rather than taking the employer’s instructions in the certification of works.

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