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Solicitor’s undertaking to ensure payment of adjudicator’s fees

I thought two interesting points were made right at the end of the judgment in JG Walker v Priory Homes. Firstly about whether it was appropriate to order indemnity costs of the enforcement application and, secondly, the solicitor’s undertaking to pay the adjudicator’s fees.

Should Priory Homes pay the costs of the enforcement application on an indemnity basis?

Edwards-Stuart J appeared to be alluding to the fact that Priory Homes should pay the costs of the enforcement application on an indemnity basis, given he found its arguments about the adjudicator’s jurisdiction lacked merit. I’d suggest it would have been an uphill struggle for Priory Homes to persuade him against that view, with language such as the following appearing in the judgment:

“…these points, which were wholly misconceived, were soon abandoned.”

“But looking at the matter more broadly, [Priory Homes’] approach is in my view too subtle by half.”

“The Defendant’s submissions to the contrary had no merit whatsoever.”

“[Priory Homes’] second point has no more merit that [its] first point.”

It’s a shame the judgment doesn’t tell us the outcome of those subsequent submissions. I suspect they’d have made for interesting reading.

Undertaking to pay the adjudicator’s fees

At first glance, the undertaking given by JG Walker’s solicitor to pay the adjudicator’s fees and expenses, once that sum of money is received from Priory Homes, may not look all that surprising. The adjudicator decided that Priory Homes should be liable for his fees and expense (some £8,000 odd). When he wasn’t paid, the court ordered Priory Homes to pay those fees to JG Walker. The solicitor’s undertaking would simply ensure that money reached its intended recipient, Richard Silver, the adjudicator. Since the adjudication took place in September and October, it is arguable that he had been kept out of his money for long enough.

However, what struck me about this aspect of the court’s order was whether JG Walker could recover from Priory Homes a sum of money that it hadn’t actually paid out. Edward-Stuart J certainly thought so.

I also wondered if the non-payment of the adjudicator was a sign that parties are reacting to the judgment in PC Harrington Contractors Ltd v Systech International Ltd, where the Court of Appeal held that an adjudicator was not entitled to his fees because his decision was unenforceable due to a breach of the rules of natural justice.

Although we do not know the details of the abandoned “serious errors and inconsistencies” arguments (and the judgment does not suggest that Priory Homes raised natural justice arguments), this judgment may be a sign that we are moving to a position where either party will be reluctant to pay the adjudicator’s fees just in case the court holds that the adjudicator erred in some way.

One thought on “Solicitor’s undertaking to ensure payment of adjudicator’s fees

  1. Very interesting Matt, I also thought it was interesting that effectively Edwards-Stuart J fixed a ‘slip’ on the adjudicator’s behalf. That could be a can of worms!

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