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You'll pay for this
If an adjudicator decides against you, you'll feel
a little sore. You may even refuse to give them their fees. But,
sadly, you'll find it difficult to get a court to back you
"An adjudicator is entitled to fees, whether the
parties agree or disagree with his decision"
Adjudicators are quite happy to lord it over
disputing parties who doff their caps, nod in agreement, and laugh
at their jokes … until the decision is issued. Then the
adjudicator instantly becomes a bumbling twit, a loony, another
sort of joke. When this adjudicator says which party is to pay his
fees, it feels like insult added to injury. We adjudicators are
sorry about that.
Sometimes the poor old adjudicator doesn't get
paid, and then has a dispute of his own and has to sue for his
fees. He goes to the county court and doffs his cap at a judge and
laughs at his jokes. Chris Smart is an adjudicator who
ended up in court in a dispute over fees. The builder had been
ordered by the architect adjudicator not only to pay the other
party to the adjudication, but to pay £1561 in adjudicator's fees.
The builder, WH Tolly, quarrelled about the size of the fee and
the hours claimed. And, by Jove, the district judge saw it the
builder's way. He cut it to £400, saying that a reasonably
competent solicitor would have charged about that.
I bet Chris Smart hurled his adjudicator's cap
on the floor at that. Off he went to his solicitors, who
recommended an appeal. It was heard in Bristol County Court (Stubbs
Rich Architects vs WH Tolly & Son Ltd; case number 84 in
the adjudication series).
This judge decided that the first court was wrong to compare the
work of a solicitor with that of an adjudicator; it was not like
for like. The adjudicator acts as both investigator and judge. In
any case, it wasn't for the court to substitute its own view of
what constitutes reasonable hours. Instead, there had to be "very
clear evidence that the amount is more than the court would have
considered appropriate if it had been approaching the matter
afresh". And since the builder provided no expert evidence to
criticise the fees, the adjudicator got the whole lot.
There was another more interesting reason for
rejecting the builder's complaint. The standard form JCT contract
containing the adjudication clause quite properly included the
Construction Act's indemnity for the adjudicator. He "is not
liable for anything done or omitted in the discharge … of his
function … unless done in bad faith". So, said the judge, "fees
may only be challenged if, and only if, the adjudicator has acted
in bad faith". Nobody suggested that Mr Smart had done so. In
which case, the only recourse would be to allege that the fees
were so excessive as to amount to "misconduct"; that is, if the
adjudicator has either put his own interests before those of the
parties or misconceived the basis on which he should carry out the
calculation of his fees.
The judge appears to be saying that the
indemnity only allows an attack on fees when they indicate an
overcharge sufficiently substantial as to require the court to
prevent an injustice. If that's right, high charges remain
untouched and payable.
The second "fees case" is Paul Jensen vs
Staveley Industries Plc (number 83
in the series).
Mr Jensen is a very experienced adjudicator. He made a decision
that he had no jurisdiction because the contract did not satisfy
the rules for adjudication. He stopped – then sent his bill.
Staveley said he was wrong in his decision, so it wouldn't pay his
fees. Mr Jensen sued. The county court judge said it wasn't the
court's business whether an adjudicator was wrong or right. "The
mere fact of alleged wrongful determination cannot be construed as
default or misconduct." An adjudicator is entitled to fees,
whether the parties agree or disagree with his decision.
The problem at the heart of fighting for fees
is that the Construction Act did not provide a statutory right for
the adjudicator to hold on to his decision until his fee was paid.
The Arbitration Act does so. No pay, no award.
Consider this too: the county court will
usually make an award for costs only if the action is for £5000 or
more. Perhaps it's time for the adjudicator nominating bodies to
think about how to overcome this tricky topic of getting paid.
Maybe the adjudicators could do the job for no fees at all – then
it wouldn't matter about being thought a twit.
Readers are invited to forward recent judgments for reporting
in this column (with full acknowledgement) to: Tony Bingham,
3 Paper Buildings, Temple, London EC4Y 7EU.
DX:007I LDE
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