Adjudicator not entitled to fees for unenforceable decision

Adjudicator not entitled to fees for unenforceable decision

Published:

Author: Adam Hiscox

Following a recent Court of Appeal decision, adjudicators must take more care to ensure that their decisions are enforceable.

The Court decided in PC Harrington Contractors Ltd v Systech International Ltd [2012] that an adjudicator was not entitled to his fees by virtue of his decision being unenforceable - owing to a breach of the rules of natural justice. This can only be beneficial to the adjudication process.

The judgment is logical: where there is an unenforceable decision, why should a party to an adjudication have to pay for something that is of no use to it? The benefit for the payment of fees must surely be that the parties have their dispute resolved.

Before this decision, aside from the possible negative publicity it would attract, arriving at an unenforceable decision had no tangible ramifications for an adjudicator.

This decision will no doubt result in adjudicators treading very carefully when faced with issues of natural justice and other jurisdictional issues that could render decisions unenforceable.

One possible downside could be a rise in the number of resignations and time taken over jurisdictional issues in the adjudication process.

Adjudicators could seek to side-step this decision by redrafting their terms of appointment to include provisions that they are paid even if their decision is ruled unenforceable. The upshot for parties to adjudications and their advisers is that it is now more important than ever to read adjudicator's terms and conditions carefully.