Faithful & Gould Limited -v- Arcal Limited and Ors.
The adjudicator's employer's application to enforce the adjudicator's decision for the defendants to pay his fees should not be struck out on the ground that the adjudication rules required an adjudicator to be a natural person acting in his personal capacity
25 May, 2001
The defendant company was the claimant in adjudication proceedings and was in receivership. The proposed adjudicator conducted correspondence with a representative of the receivers (before agreeing to act in that capacity) in which he sought assurances that the receivers would be personally responsible for his fees. The adjudicator's decision went against the defendant company and he ordered that company (and thereby the receivers) pay his fees but the company and its receivers refused to do so. The employer of the adjudicator applied to the court for enforcement of the decision as to the fees by way of summary judgment. The defendant company and the receivers made a cross-application for the employer's application to be dismissed on the ground that the rules governing adjudications under the Construction Act 1996 required the adjudicator to be a natural person acting in his personal capacity. It was held that the defendants? application should be dismissed on the basis that it was both unattractive and untenable. This was because the adjudicator (like many other adjudicators) happened to practice in a limited company which administered and recovered his fees for him. In addition there was nothing in the rules which required the adjudicator to sue for his fees in his personal/natural capacity. The decision should be enforced because the adjudicator proceeded with great caution and sought assurances in correspondence that his fees would be paid personally by the receivers. This correspondence was concluded on the basis that the defendants in effect agreed to be bound by the decision (albeit that there was no express agreement that the fees would be paid by the receivers). Advice Note Adjudicators will often be the employees of an organisation, such as a limited company. This decision indicates that that part of a decision for the payment by a party to the adjudicator of his fees will be enforced by the courts notwithstanding that it is the adjudicator's employer seeking to enforce the payment of the fees. The adjudicator must, however, in the case of a company in receivership ensure that the receivers agree to be responsible for his fees at the outset of the adjudication.