Deko Scotland Limited V Edinburgh Royal Joint Venture et al

Any award by the adjudicator to the successful party of the "legal costs" of an adjudication must be taxed by the court before they can be enforced against the paying party by the court
 
DEKO SCOTLAND LTD v EDINBURGH ROYAL JOINT VENTURE

Scotland, Outer House, Court of Session
Lord Drummond Young
11 April 2003
 

The adjudicator held in his decision that various sums were due from the contractor to the sub-contractor. He also made an award of the “legal costs” in the proceedings pursuant to the contractual adjudication rule which empowered him to make such an award.

The contractor contended that some of the heads of expense, such as the invoices of the claims consultant and surveyor engaged by the sub-contractor for the adjudication, were not “legal” costs and that in any event the sub-contractor was first obliged to have its costs taxed by the Auditor of Court (in Scotland).

 

Lord Drummond Young held that the “legal costs” recoverable by the sub-contractor were limited to expenses or costs analogous to judicial expenses properly incurred according to established legal standards and were subject to taxation by the court. In other words the sub-contractor could not recover the costs and expenses it had incurred in the adjudication in the court enforcement proceedings simply because they had been incurred in that way.

 

He did not need to and did not go on to venture an opinion as to whether the invoices of the claims consultant and the surveyor were recoverable. This was to be left to the costs judge in the court taxation process.

 

Whilst this is a Scottish decision and the reasoning of Lord Drummond Young depended on Scottish procedure, there seems no reason why it should not also apply in England and Wales. Judges in England and Wales are empowered to make summary assessments of costs but only in respect of the court proceedings themselves. It is extremely unlikely that they would make such assessments in proceedings to enforce decisions.

 

Advice Note

If the parties to an adjudication wish to confer on the adjudicator the power to award the costs and expenses, they should consider what types of costs and expenses should be recoverable. The contract could then make express provision in this connection. They might also consider whether to empower the adjudicator not only to award costs and expenses but also to make a summary assessment of their amount. This would mean that the sum awarded would become part of the award and could later be enforced by the court if necessary.
 

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