Adjudication
Stubbs Rich Architects v W H Tolley & Son Ltd (2001)

© Daniel Atkinson 2002 05 January 2002

The decision in Stubbs Rich Architects v W H Tolley & Son Ltd (2001) is another in a line of cases challenging the level of the Adjudicator’s fees. The decision is of interest because it examines the extent of the Adjudicator’s immunity and the nature of the Adjudicator’s role. No issue was taken that the claim for payment of the fees was made not by the Adjudicator but by his firm, a matter examined and decided in Faithful and Gould Limited v Arcal Limited (2001) TCC.

Mr Christopher Smart was an Architect and partner of Stubbs Rich Architects and was appointed to act as Adjudicator in disputes between Torridge District Council and W H Tolley & Sons Ltd under two separate JCT agreements for minor building works. The adjudication agreement was signed by the parties on or about the 30th of May 2000, and set out the terms for remuneration of the adjudicator. On or about the 1st of July 2000 the adjudicator delivered two written decisions and enclosed his fees as part of his decision in the sum of £1,561.50 plus VAT.

Tolley paid the Adjudicator’s fees in full but under protest. It was alleged by implication and subsequently that the hours performed by the adjudicator were unreasonably excessive. On the 26th July 2000 Tolley issued a claim to recover the alleged overpayment. On 30th September 2000 a District Judge ordered Tolley to clarify its case by filing and serving a report from an independent architect to show that the time spent by the adjudicator was unreasonable. Tolley failed to file such a report either as ordered or subsequently.

After a hearing on 28th November 2000 Deputy District Judge Guest ordered the adjudicator’s firm Stubbs Rich Architects to repay to Tolley the sum of £1,395 by the 11^th December 2000, which it did. The grounds for the decision were first that an adjudicator did not as a matter of law enjoy an immunity from a claim that the hours and remuneration were unreasonable and second, that the adjudicator’s hours were in this case excessive.

Stubbs Rich Architects issued Notice of Appeal on the 12^th December 2000 and this was heard before Mr Recorder Lane QC in Gloucester County Court on 8^th August 2001, the instant case.

Mr Recorder Lane examined first the ground of immunity, and then the ground of excessive hours.

On the first ground, the Adjudication Agreement provided for immunity on the following terms:

“The adjudicator shall not be liable for anything done or omitted in the discharge or purported discharge of his function as adjudicator unless the act or omission is in bad faith. And this protection from liability shall similarly extend to any employee or agent of adjudicator.”

It was held that the terms, in the absence of any case law to the contrary, must be given their ordinary and natural meaning. It was held that the adjudicator’s fees formed an integral part of the adjudication agreement and therefore fell within the words "anything done or omitted in the discharge or purported discharge of his functions as adjudicator." It was held that the fees could be challenged if, and only if, the adjudicator had acted in bad faith. There was no suggestion or evidence that the adjudicator had acted in bad faith and it was accepted that the adjudicator did the hours claimed.

This disposed of the matter but Mr Recorder Lane referred and relied on the analogous position in relation to arbitrator’s fees. He decided that in the absence of a statutory regime to re-examine the adjudicator’s fees, the principles of the common law authorities set out in Mustill and Boyd on Commercial Arbitration applied. He relied on the following passage at page 240:

"If the situation is one in which a review under section 19 of The Arbitration Act is not feasible, the complainant must find a way to nullify the taxation in the award, so he can either resist a claim by the arbitrator or, if he is paid in advance, bring an action to recover the excess. For this purpose he must attack the award itself, alleging that the charges are so excessive that the arbitrator commits misconduct by insisting upon them and he must then induce the court either to set the award aside wholly or in part, or remit the award to the arbitrator for reconsideration. There is no doubt the court has jurisdiction to make an order on these lines since the discretion under section 18 of the Act is one which must be judicially exercised in good faith. Thus, if the court is satisfied from the size of the sum awarded or from other evidence that the arbitrator has either put his own interests before those of the parties or has misconceived the basis on which he should carry out the taxation, there is misconduct which justifies the remission or setting aside of the award. Consideration of this issue is not the same as retaxation under section 19. The court does not substitute its own view for that of the arbitrator. In order to make good an allegation of misconduct very clear evidence is required and it is not enough to show that the amount demanded is more than the court would have considered appropriate if it had been approaching the matter afresh."

It is suggested that this part of the decision is of general application to Adjudications, since the terms for immunity in the instant Adjudication Agreement are the terms required to be inserted in any construction contract under Section 108(4) of the Housing Grants Construction and Regeneration act 1996 and similar to the terms at paragraph 26 of the Scheme for Construction contracts.

The second ground was the allegation of excessive hours. The Deputy District Judge had applied the criterion of the reasonably competent solicitor. He had decided on the basis of how long would it take such a solicitor to read the files in this case and write his decision. It was held that the Deputy District Judge fell into grave error.

It was held that the role of an adjudicator is wholly different from that of a solicitor who is preparing a client's case for trial. The solicitor prepares a one-sided case for argument in court. The adjudicator, on the other hand, had to read the files, interview the parties, visit the sites, and then prepare his decisions. He was acting in the role of both investigator and Judge.

It was held that if comparative evidence was relevant and admissible then it should have been in the form of an expert architect/adjudicator; as the court had earlier made provision for, and no doubt by implication wished to hear from.

It was held that a court must be very slow to substitute its own view of what constitutes reasonable hours relying on the passage from Mustill and Boyd at page 240.

Accordingly the appeal succeeded and Tolley was ordered to repay to Stubbs Rich Architects the sum of £l,395 which had been paid.