Can you claim Adjudication Costs via the CPR Part 36 procedure?

6 June, 2017
by: Cripps Pemberton Greenish

The legal costs incurred in Adjudication can be significant, especially if expert evidence is required and/or the dispute revolves around the contractor’s final account.  The basic rule is that the adjudicator has no power to make orders as to the payment of the parties’ costs (in contrast to his own fees and expenses) unless the parties agree that he may do so.  CPR Rule 36.13(1) refers to the claimant recovering “the costs of the proceedings”.  The question often posed is whether the cost of the court proceedings includes costs incurred by earlier or later adjudications.

A recent case1 looked at this point.  A sub-contractor claimed payment of unpaid invoices from a main contractor .  It had referred this matter to an adjudication that had been commenced in 2015 but as the adjudicator resigned on jurisdictional grounds the adjudicator had not been completed.  The sub-contractor made an offer to accept a lower sum in February 2016 and as that offer was not accepted it commenced a second adjudication, that it won.

The main contractor did not pay the money that the adjudicator awarded it must pay the sub-contractor.  The sub-contractor therefore commenced adjudication enforcement proceedings.  Prior to the court hearing for those adjudication enforcement proceedings the main contractor accepted the sub-contractors earlier offer.

Based on the sub-contractor’s offer stating it was a Part 36 offer the sub-contractor it claimed the costs it incurred in the two adjudications.  Whether the main contractor had to pay those costs due to the Part 36 procedure was decided by the Court.  The “costs of the proceedings” meant the cost of the court proceedings, threatened in February 2016 when the offer was made but not actually commenced until later. The costs of the adjudications were not costs of the proceedings.  “Costs of proceedings” includes “recoverable pre-action costs” but those will not normally include the costs of separate, stand-alone ADR proceedings such as adjudication.

1 Wes Futures Limited v Allen Wilson Construction Limited [2016] EWHC 2863 (TCC)