The price of peace: can you challenge an adjudicator’s fees?
The question of adjudication costs is a common topic (indeed it’s one this blog has discussed before) – but what about recoverability of the adjudicator’s fees themselves?
This was the subject of the recent Technology and Construction Court case of The Vinden Partnership Ltd v Orca LGS Solutions Ltd and another .
The company through which the adjudicator had provided his services brought a claim, in respect of unpaid fees, against the parties to the adjudication (although a settlement had been reached with the second defendant when the application was heard).
The adjudicator charged £285 per hour in accordance with their standard terms of appointment. The adjudication took 58 days and 114.5 hours work. The adjudicator produced a 64 page decision accompanied by a quantum breakdown.
The resultant bill was for £32,842.50 plus VAT.
Referring to the 2011 case of Fenice v Jerram Falkus the court noted that:
– There is an implied obligation that an adjudicator’s fees should be reasonable. It would take “very clear words indeed” to exclude this obligation; however
– Where an adjudicator provides details of time spent the evidential burden falls on the defendant to show a prima facie case for unreasonableness.
– The court should adopt a robust approach and, given the circumstances in which adjudicators work, allow the adjudicator a considerable margin of appreciation; and
– An adjudicator has considerable discretion as to the procedure to be adopted and is entitled (within reasonable limits) to decide how long is needed to deal with the matter and produce a proper decision.
Taking into account the value and complexity of the claim the court concluded that the time taken was reasonable and proportionate. The court also noted the number and length of submissions made by both parties during the adjudication and that the evidence regarding time spent came from an experienced and well respected adjudicator.
None of the defendant’s challenges to time spent were made out. The claimant was entitled to summary judgment as the defendant had failed to show a real prospect of defending the claim on the basis that the fees claimed were unreasonable.
The claimant was entitled to their fees and also, in accordance with their terms, their fees incurred in pursuing the action and contractual interest.
The case is a helpful reminder – to both adjudicators and the parties who might find themselves using one – that an adjudicator’s fees do need to be reasonable but, if questioned, the burden of proving unreasonableness falls to the other party(ies).