1. Introduction This series of articles continues the reporting and review of cases on the enforcement of adjudicators awards begun in the Journal of the Chartered Institute of Arbitrators. The law is stated at 23 October, 2017. There has been a flurry of decisions about adjudication in the past three months, which continue to excite interest and contribute to the law on the subject. Two of the cases deal with payment, one a final decision after trial about finality and nature of an adjudicator’s award. There have been decisions on the application of the adjudicator’s terms, and the reasonableness of fees, on the power to award ‘debt recovery costs’, together with other decisions on jurisdictional issues. We round off with cases on the use of Part 8 procedure, enforcement and stay in cases of claimed insolvency, and the right to withdraw a referral and start afresh. 2. Adjudicator’s agreement — binding by conduct See (1) Christopher Linnett Ltd and (2) Christopher Linnett v Matthew J Harding t/a M J Harding Contractors 6 Mr Linnett claimed payment of his fees as adjudicator from Mr Harding who was party to a series of adjudications with Gary Paice and Kim Springall (the employers) who had engaged Mr Harding to undertake construction works for them. Following enforcement of the last decision in the round of disputes, Mr Harding was ordered to pay the employers’ share of Mr. Linnett’s fees. (£1,721.60 including VAT). The fees were eventually paid but Mr Linnett and his company brought an action to recover interest for the late payment of the fees under the Late Payment of Commercial Debts (Interest) Act 1998 ( “LPA” ). Amongst the issues to be tried between the parties, three questions were of wider interest: 1. WasMr Harding party to the adjudicator’s agreement? 2. If so between whom was the agreement concluded? 3. Does the LPA apply to the late payment of the fees and what sum if any was the Claimant entitled to for interest, statutory compensation and debt recovery costs? After setting out the facts, the terms of the adjudicator agreement, and the rival contentions, the court concluded as follows
1. The relevant authority to consider was Linnett v Halliwells LLP. 7 The employers as referring party had entered into the adjudicator’s agreement. Mr Harding as the responding party had not done so, but had participated in the adjudication, albeit without prejudice to his jurisdictional objections. He had by his conduct requested the adjudicator to adjudicate on the dispute. An email sent on behalf of Mr Harding to the adjudicator had said “we look forward to working with you” . There was no other sensible conclusion but that he had agreed to the appointment. 2. The agreement was with Mr Linnett personally. It was Mr Linnett who was nominated by the nominating body, RICS. It was consistent with the use of the first person in the terms. The role of adjudicator can only be performed by an individual. There was no reason in principle why the appointment could not provide for payment to be made to a third person firm or limited company. Equally, a firm or limited company could enter into an agreement to provide an individual as adjudicator. It would simply be a question of fact in each case whether the contract was made with the individual or the firm or company. 3. The LPA applied because it was expressly so provided in the adjudicator’s agreement. It would have applied if the parties were acting in the course of a business. Here Mr Harding contended that the three disputes in which Mr Linnett was appointed, arising under one building contract, could not amount to a business. It was true that the use of adjudication services by Mr Harding was not integral to his business as a builder, but incidental to it. It was necessary to decide whether a degree of regularity was required for it to be said the parties were acting in the course of a business. When set against the purpose of the LPA which was to provide business with a right to interest for late payment (not to protect or enhance consumer rights), the adjudicator’s agreement could properly be regarded as a commercial contract between two parties for the supply of services. It was not necessary to import a degree of regularity. It made practical sense not to have to enquire of a purchaser whether and if so how often he might have entered into similar contracts on previous occasions. Thus, having already found Mr Harding was acting in a business capacity, the court also decided the adjudicator agreement was concluded in the course of a business. The fee claimed was a qualifying debt under section 3, LPA. The applicable rate was 8.5%. the statutory compensation for this debt was fixed by the LPA at £100. Mr Linnett was also entitled to debt recovery costs based on 7.3 hours of time at Mr Linnett’s hourly rate of £215, amounting to £1,569.50 less the £100 compensation already allowed.
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