Adjudicators, Jurisdiction and Fees

I recently issued my 100th Adjudicators Decision. Whilst this may have been a personal landmark, there were no cakes, no candles or any other celebrations for that matter. Just a little bit of quiet reflection and an intake of breath before diving into the next case in line.
 
 

I recently issued my 100th Adjudicator’s Decision. Whilst this may have been a personal landmark, there were no cakes, no candles or any other celebrations for that matter. Just a little bit of quiet reflection and an intake of breath before diving into the next case in line.

 
When I look back and think about the cases I have been involved in, very few have started and finished without some form of jurisdiction challenge being raised. It is fairly typical for a Responding Party to raise a challenge to an Adjudicator’s Decision as soon as the starting bell is sounded by the relevant nominating body and the Adjudicator is appointed.
 
What normally happens is that the Responding Party’s lawyer will write to you, tell you you have no jurisdiction, demand that you resign and say that if you proceed they will continue to object, reserve their position and refuse to pay any part of your fees and expenses. Upon receiving your view that you have jurisdiction and are proceeding, the Responding Party will then continue to argue the point right up to the issue of your Decision and beyond if you have found against it. On the other hand - surprise, surprise - in the event that you have found in its favour, the Responding Party will have a change of heart, decide that you have the wisdom of Solomon after all and elect to argue that your Decision is absolutely right, conveniently abandoning all earlier objections to your jurisdiction.
 
This is all very interesting but the question those of us who accept appointments as Adjudicator really want to know is this. Can an Adjudicator recover fees from a party that raises questions about his or her jurisdiction? Thanks to one Christopher Michael Linnett, to whom we are all very grateful, we now know that he or she can.
 
In the case of Christopher Michael Linnett -v- Halliwells, Mr Linnett was appointed by the RICS to act as Adjudicator in a dispute between ISG Interior Exterior and Halliwells concerning a dispute under a contract for the fitting out of Halliwells’ new Manchester office.
 
Halliwells challenged the jurisdiction of Mr Linnett from the outset, arguing that ISG’s Referral was served late. Halliwells refused to sign Mr Linnett’s terms of appointment and invited him to resign. Mr Linnett declined and proceeded with the reference, ultimately deciding in ISG’s favour and that Halliwells were to pay his fees and expenses.
 
Following the issue of his Decision, Mr Linnett issued his invoice to Halliwells who refused to pay. The matter came before his Honour Mr Justice Ramsey on 17 December 2008 in what was to turn out to be a very good day for Adjudicators up and down the country.
 
Although the Court decided that there was no contract between Mr Linnett and Halliwells (Halliwells had refused to sign Mr Linnett’s terms of appointment), this was not the end of the story because Halliwells had clearly derived benefit from Mr Linnett’s Decision even though it had ultimately lost.
 
By participating in the adjudication whilst reserving its position, Halliwells were in effect requesting the Adjudicator to carry out works and make his decision. Halliwells were found to be liable to pay Mr Linnett’s reasonable fees and expenses.
 
From this important judgement the following general principles can be derived:
 
  1. Where a person acts as an Adjudicator then, by accepting the appointment, that person is entitled to reasonable remuneration from the parties for work done;
  2. Where a person acts as an Adjudicator then the parties are jointly and severally liable for that person’s fees and expenses;
  3. Where a person acts as an Adjudicator but does not have jurisdiction then that person may have a claim for payment based on the fact that work was carried out at the request of the parties, or one of them in any event.
 
At last we now have some clarity on the position of adjudicators in relation to the payment of their fees and expenses where one party is insistent on playing the Jurisdiction Game.
 
Peter Vinden is a practising adjudicator, mediator, expert and conciliator. He is Managing Director of Vinden and can be contacted by email at pvinden@vinden.co.uk   
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