Adjudicators Duties - Right to Payment and The Scheme

There have been relatively few reported cases concerning an Adjudicator’s right to be paid for services provided in the discharge of his or her functions where the decision has not been enforced by the Courts.
The appeal of the TCC judgement, PC Harrington Contractors Ltd v Systech International Ltd [2012] EWCA handed down on 23 October 2012 appears to have changed all that.
The Court of Appeal was requested to decide whether or not the Adjudicator should be paid where Mr Aikenhead had declared that the adjudicator had “failed to produce Decisions within the meaning of the Scheme for Construction Contracts (England and Wales) Regulations 1998…. and in each Adjudication committed a material breach of natural justice, in consequence of which each of the Adjudicator’s Decisions….. is enforceable”
The case advanced by PC Harrington in both the TCC and Court of Appeal was that the Adjudicator was not entitled to any fee because he failed to produce an enforceable decision.
The Court of Appeal decided that absent an express term in the Adjudicator’s agreed terms there is no obligation under the Scheme to pay for an unenforceable Decision or for any services provided by the Adjudicator which were “preparatory to the making of an unenforceable decision”.
It is a matter of opinion whether parties will now look to try and avoid paying Adjudicator’s fees. No doubt we will see parties using this Court of Appeal Decision to support jurisdictional challenges and we may now see an increasing number of Adjudicator resignations as a result. It is far from clear whether this unfortunate outcome is what Parliament intended.
Adjudicators up and down the country will now be looking at their standard terms and introducing an express term which will entitle the Adjudicator to be paid for the services provided, even if the Decision is not enforced. It remains to be seen whether the Courts will enforce such a term.
We clearly haven’t heard the last on this subject and you can rest assured that before I accept any new adjudication appointments I will be amending my terms!

Peter Vinden is a practising adjudicator, arbitrator, mediator, expert and conciliator. He is Managing Director of Vinden and can be contacted by email at pvinden@vinden.co.uk

Peter Vinden

Peter is an experienced professional in the construction industry with particular expertise in quantity surveying and the commercial management of contracting organisations. 

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