Mr Cartwright was an adjudicator in respect of a dispute between Miss Lydia Fay and Colonial Preservation & Construction Ltd regarding a JCT Building Contract. He had been appointed by the RICS and had issued his terms and conditions to the parties. He apportioned his fee on a 50/50 basis, and issued an invoice on 13 March 2002 to both parties. Colonial Preservation & Construction Ltd paid, but Miss Fay refused to pay.
Miss Fay refused to pay on the basis that:
- The adjudicator was not entitled to claim a fee from Miss Fay because she was not a party to the contract;
- The adjudication rules were not incorporated into the contract;
- She was a consumer and could rely upon the Unfair Terms in Consumer Contract Regulations Act 1999; and
- The adjudicator acted outside of his jurisdiction and was therefore not entitled to be paid.
District Judge Rutherford found that if the contract incorporated the adjudication rules, then the adjudicator had enforced the terms relating to payment of his fee based upon the Contracts (Rights of Third Parties) Act 1999 as there was no intention by either of the parties to the contract that those terms would not be enforceable by a third party adjudicator. Miss Fay had signed the contract and was therefore bound by it.
He then considered the Unfair Terms in Consumer Contracts Regulation Act 1999 and in particular the adjudication provisions in the JCT Contract would lead to a significant imbalance between the parties. He came to the conclusion that the term was not an unfair term (applying D-G of Fair Trading vs First National Bank  1 AC 481, Lord Bingham of Cornhill at page 494). Finally, the adjudicator was acting within his jurisdiction so was entitled to his fee. D J Rutherford therefore ordered the defendant to pay the fee, together with interest, the court fee and the expenses of the witnesses.
*Full case details
Mr D J Cartwright vs Miss Lydia Fay, 9 February 2005, Bath County Court, D J Rutherford.
Many thanks to Ralph Wynne-Griffiths for kindly providing a transcript of this case.
Contact Fenwick Elliott on 020 7421 1986 or NGould@fenwickelliott.co.uk
This case is interesting not just because it shows that judges will enforce the payment of adjudicators fees from responding parties, but also because the judge considered the application of the Contracts (Rights of Third Parties) Act 1999. Few cases have considered the application of this act in practice. The judge accepted that an adjudicator is a beneficiary under the contract between the disputing parties regarding the Contracts (Rights of Third Parties) Act 1999. This could not be the case where the application of that act has been excluded by the terms of the contract, as is often the case with many standard forms.