Picardi v Cuniberti
Technology and Construction Court
His Honour Judge John Toulmin CMG QC
19 December 2002
The architect brought adjudication proceedings against the homeowners in respect of unpaid fees under his contract of engagement with them notwithstanding that the Construction Act 1996 did not apply to private dwelling houses. The adjudicator awarded a specified sum to the architect. The homeowners refused to pay the architect and the architect brought court enforcement proceedings. The homeowners argued that the decision was unenforceable.
Judge Toulmin held that no contract incorporating RIBA conditions of engagement and its adjudication clause was entered into. However, if this conclusion was wrong and the RIBA form had been incorporated into the contract, the decision should still not have been enforced for two reasons.
The first reason was common law rule that where a contract is subject to conditions, those which are particularly onerous or unusual have to be brought properly and fairly to the other party's attention. The RIBA guidance notes were correct in characterising the adjudication clause as an unusual term which had to be brought properly and fairly to the other party's attention
The second reason was that the adjudication clause should have been individually negotiated with the homeowners so as to comply with the Unfair Terms in Consumer Contracts Regulations 1999. Schedule 2(i)(q) to the Regulations provides that terms with the effect of excluding or hindering the consumer’s right to take legal action or to exercise any other legal remedy are unfair. The adjudication clause in the RIBA conditions of engagement required the consumer to follow it and would have caused irrecoverable expenditure in either prosecuting or defending a claim. This was something which might hinder the consumer’s right to take legal action (and the fact that the consumer was deliberately excluded by Parliament and the Act reinforced this view) insofar as costs in an adjudication could be very significant.
Architects wishing adjudication to be available and recommending the use of the RIBA Conditions of Engagement to homeowners for services to be rendered in respect of their private dwellings should point out the adjudication clause in those conditions to the homeowners and obtain their express approval to its retention. If they do not, it is very unlikely that the court will regard an adjudication as having been valid.