Getting paid is a subject that is close to everyone’s heart. It is probably why I have blogged about payment so much over the years, from the early days when I considered when I would get paid to my most recent piece about adjudicators’ T&C’s. Along the way, I’ve looked at a variety of other topics, such as at what point an adjudicator should start incurring fees.
I have also considered some key judgments, such as Linnett v Halliwells LLP, Fenice Investments Inc v Jerram Falkus Construction Ltd, PC Harrington Contractors Ltd v Systech International Ltd and Christopher Linnett Ltd v Harding (t/a M J Harding Contractors). Even if you don’t remember the cases, the principles are likely to be familiar (or, at least, I hope so!).
Therefore, it should come as no surprise that this week I’m turning my attention to HHJ Davies’ judgment in The Vinden Partnership Ltd v Orca LGS Solutions Ltd.
The Vinden Partnership Ltd v Orca LGS Solutions Ltd
This was a claim by Peter Vinden’s company for fees incurred in an adjudication between Orca LGS Solutions (as the referring party) and Stourport on Severn Care Ltd (as the responding party).
The adjudication took place between 19 January 2017 and 16 March 2017, when Mr Vinden’s decision was issued. It is not clear what sum he awarded (or to which party), but something in the region of £600,000 was referred to as being in dispute in the referral. The court called this a “relatively substantial claim”.
Similarly, the judgment doesn’t say which party was ordered to pay the adjudicator’s fees. Mr Vinden spent 114.5 hours at an hourly rate of £285. That came to just under £33,000 plus VAT. However, the adjudicator’s appointment provided that the parties would be jointly and severally liable for his fees, which is presumably why the claim was brought against both parties.
Were the adjudicator’s fees reasonable?
The court noted that the starting point was HHJ Waksman QC’s judgment in Fenice Investments v Jerram Falkus (which I looked at at the time), where the court concluded that:
“… it was not open to the claimant to recover the fees in full on the basis that their reasonableness was irrelevant.”
“…there is an evidential burden on the defendant to make out a prima facie case for unreasonableness and that the court should adopt a robust approach to this question, allowing the adjudicator a considerable margin of appreciation, given the circumstances in which adjudicators have to work; namely working at speed and under pressure from the parties in circumstances trying very hard to get it right in often challenging circumstances in a way which is as fair to both parties as can reasonably be expected. I take the view that the court should be careful against considering the reasonableness of the time taken by reference only to the bare bones of the decision rather than the process which led to that result or with the generous benefits of hindsight.”
The question for the court here was whether £33,000 was a reasonable sum to incur in the context of the actual dispute referred to Mr Vinden. Ultimately, it decided it was. This was a “multifaceted dispute with issues of law, fact and quantum involved”. It involved seven heads of dispute, including for liquidated damages, variations and the valuation of certain items of work, which led to a:
- 53-page referral, supported by two witness statements and three files of documents.
- Response that filled three volumes and had two supporting witness statements, as well as detailed programme analysis and reasons for the delay.
- 27-page reply, with two more witness statements and more supporting documents.
- 22-page rejoinder with two more witness statements and eight appendices.
- 27-page surrejoinder with another bundle of documents.
- 64-page reasoned decision with a quantum breakdown.
There was also the responding party’s jurisdictional challenge to deal with and an eight-hour site visit that the responding party insisted should take place, not to mention “copious correspondence” and dealing with administrative matters, such as extensions of time.
Given the amount of paperwork involved, I’m not surprised Mr Vinden clocked up the time he did or that the court found that the defendant had not “surmounted the evidential burden” of showing the time spent was unreasonable.
What does the judgment teach us?
Adjudicators need to keep detailed time records, as Mr Vinden was able to rebut all of the defendant’s criticisms. It is also worth thinking about what you put in your T&C’s. Mr Vinden was entitled to his reasonable costs of pursuing the debt (some 10.7 hours) plus interest at 8% over RBS’ base rate because these were included as express terms of the appointment.