Paul Jensen Ltd v Staveley Industries Plc

The adjudicator was entitled to recover his fees relating to his determination of the preliminary issue of whether he had jurisdiction notwithstanding the defendant's contention that the adjudicator had been wrong in making this determination on the basis that he had misunderstood and misapplied the relevant caselaw
At the beginning of the adjudication the adjudicator was requested to make an initial determination by means of a preliminary issue as to whether he had jurisdiction. The adjudicator was provided with copies of what were asserted to be the relevant judgments relating to the issue of his jurisdiction. The adjudicator determined that he did not have jurisdiction with the result that the adjudication came to a close at that point. The adjudicator submitted an invoice for his fees relating to this initial determination. His fees were not paid and he instituted court proceedings for their recovery. The defendant to the proceedings brought by the adjudicator was one of the parties to the adjudication. The defendant defended the adjudicator's claim by producing before the court a letter of advice it had received from its solicitors. This letter stated that the adjudicator had been wrong in his determination of the issue and has misinterpreted the relevant caselaw. Mr District Judge Donnelly rejected this defence and held that the adjudicator was entitled to recovery the amount of the invoice for his fees (there being no evidence before the court to question the reasonableness of the amount of the invoice). The judge stated that he was satisfied that it is not for the court to determine whether the adjudicator interpreted the caselaw wrongly or not. The adjudicator decided he ought not to dealt with the matter. He had been asked to deal with the question as a preliminary issue and did so. Whether he was right or wrong is irrelevant. Paragraph 11 of the Scheme for Construction Contracts dealt with the question of aborting the appointment of the adjudicator and entitlement to fees. No one has suggested default or misconduct on the part of the Claimant and the mere fact of the alleged wrongful determination could not be construed as default or misconduct. In the circumstances the Scheme indicates that the Claimant is entitled to his fees. Advice Note The courts will not be sympathetic to any attempt by a party to an adjudication to argue that it should not be liable to pay the adjudicator's fees when the adjudicator holds that he does not have jurisdiction to proceed with the adjudication merely on the ground that the adjudicator's determination in this connection was incorrect.