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Contract Adjudicator Entitled to His Fees Despite Resignation, Judge Rules

Professionals are, like everyone else, entitled to be paid for their work – but in what circumstances can their fees be legitimately withheld? A judge considered that issue in the case of a contract adjudicator who resigned from his role in resolving a building dispute before reaching a decision.

Various disputes concerning money and defects arose in the context of construction works at a restaurant. The matter was referred to the adjudicator on the basis that the parties to the contract were a building company and the company that owned and operated the restaurant.

In resigning from the proceedings, the adjudicator took the view that the company’s majority shareholder and director was the builder’s client and that the restaurant company itself was not a party to the contract. He concluded that, as the director was not joined in the adjudication, he had no jurisdiction to consider the matter.

After the builder refused to pay the adjudicator’s fees, the company through which the latter operated launched proceedings. In its defence, the builder asserted that no fees were payable because the adjudicator had, for no sound reason, abandoned his appointment, deliberately and impermissibly refusing to provide a decision.

Ruling on the matter, the judge found that the adjudicator was entitled to conclude that the contract was with the director, not the restaurant company. It would, however, have been wiser for him to inquire of the parties whether they nevertheless accepted his jurisdiction. At the time of his resignation, there was in fact no dispute either as to the identity of the contracting parties or as to his jurisdiction.

In finding that the adjudicator was nevertheless entitled to his fees, the judge found that he could not be said to have abandoned his appointment. In accordance with what he regarded as his duty, he resigned on the basis that it was not open to him to reach a decision on a dispute between the builder and the restaurant company when the latter was not a contracting party.

His resignation was not itself a breach of the terms of his engagement. In honestly and diligently concluding that the correct course was to resign, it could not be argued that he had acted in bad faith. The terms and conditions under which he served were reasonable and did not fall foul of the Unfair Contract Terms Act 1977.

The adjudicator’s fees, which came to £4,290 plus VAT, were not excessive and the judge awarded his company summary judgment against the builder in that amount.

7 June 2021
Last Updated
11 July 2021