Adjudicator’s Fees disallowed where his decision was unenforceable (previous decision reversed)

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PC Harrington Contractors –v- Systec International (CILL) 2011, Court of Appeal

We reported this case last year when an adjudicator, employed by Systec, sued for his adjudication fees.  Even though the adjudication he produced was, due to a mistake by him, unenforceable the High Court had ruled that he had delivered adjudication services and was entitled to be paid for them.  Harrington appealed.

Court of Appeal HELD:

The parties contracted with the adjudicator to produce an enforceable decision.  The adjudicator had not produced an enforceable decision and therefore was not entitled to his fees.  The Court’s logic was very clear.  The contract for adjudication services was an “entire contract” to produce an enforceable decision rather than a “divisible contract” for the performance of a series of functions and steps of which the decision was only one.  Unfortunately the Court had no time for Akenhead J’s policy considerations.  The specialist judge had been concerned that if adjudicators start to worry their decisions might not be enforceable and therefore their fees might not be paid, then they will be much more willing to give in to bullying over jurisdiction arguments.

The result is that the decision of the Court of Appeal was probably fair as far as Harrington were concerned, but the effects upon adjudication generally, and the willingness of adjudicators to stand up to bullying by the parties, are likely to be serious and adverse.

For more information, help or advice please contact Rob Langley on 0191 211 7975 or email [email protected].