Adjudicator’s Fees – What if the decision is wrong?

While resisting enforcement of an adjudicator’s decision is rare, there are still a number of occasions each year where the courts disagree with an adjudicator’s non-binding jurisdictional findings.  One such case arose recently in RBH Building Contractors Ltd v Ashley James and Tracy James [2025] EWHC 2005 (TCC).  The case, in and of itself, was not particularly unusual.  However, Mr and Mrs James also sought to have the adjudicator’s order as to fees overturned.  The question before the court was, did it have the power to change how the fees had been allocated?

Background

Mr and Mrs James were a couple who had bought a plot of land in Devon.  They employed RBH to build them a house on the plot, sold their house in Essex, and moved to live in a caravan on the site until the works were finished.

There was no written contract between the parties.  So, when a dispute arose over payment (or more accurately a failure to serve a pay less notice), RBH issued adjudication proceedings.  In the adjudication, Mr and Mrs James objected to the adjudication on the basis that, as residential occupiers, there was no “construction contract” for the purposes of the Housing Grants Construction and Regeneration Act 1996 (the “Act”).  The adjudicator rejected this argument as to him, by this time, Mr and Mrs James appeared to have decided to rent out the property or sell it.  He went on to find that no valid pay less notice had been served and ordered Mr and Mrs James to pay RBH £663,016.16 along with his fees.

Mr and Mrs James did not pay and RBH issued enforcement proceedings.  The Court, presided over by Neil Moody KC, considered two points:

i. Whether the residential occupier exemption applied to Mr and Mrs James (being a point of fact they needed to only prove a real prospect of success at a full trial); and

ii. Whether the letter they had issued before the end of the relevant payment cycle could be a valid pay less notice.

The judge found in favour of Mr and Mrs James on both points (the second being obiter given the finding that the adjudicator lacked jurisdiction).

However, this left Mr and Mrs James with an obligation to pay the adjudicator’s fees, despite having a judgment that clearly said that the adjudicator had been wrong both in terms of jurisdiction and his findings on the actual case.  They asked the court to reverse the adjudicator’s ruling on fees and instead order payment from RBH.

Arguments

While accepting that case law was very much against him, counsel for Mr and Mrs James advanced three points in an attempt to persuade the Court that it had the power to amend the fees decision:

i. First - that the leading case in the area Castle Inns (Stirling) Ltd v Clark Contracts [2005] Scot CS CSOH 178 (approved in England by A&V Building Solution Ltd v J&B Hopkins Ltd [2024] EWHC 2295) could be distinguished as the present case revolved around a single issue rather than many. Therefore, the question as to who was in the right was binary and Mr and Mrs James were in the right;

ii. Second - that the Supreme Court case of Aspect Contracts (Asbestos) Ltd v Higgins Construction Plc [2015] UKSC 38 created an implied term that there was a right to repayment of an overpayment brought about by the adjudicator’s decision on final determination. Counsel argued that this should also cover the adjudicator’s fees;

iii. Third – that alternatively a different implied term should arise, being that if an adjudicator's decision was reversed by a final determination of a court, then the ultimately successful party would be entitled to recover any adjudicator's fees paid if the matters wrongly decided by the adjudicator could be shown to have led to the requirement to pay the adjudicator's fees.

Ultimately none of these arguments swayed the judge’s view.  In a relatively brief decision Mr Moody KC determined that the decision in Castle Inn was not distinguishable.  It had been put on a broad footing and there was benefit in the certainty that adjudicator’s orders as to fees were not alterable by the court.  Additionally, neither the implied term from Aspect (which could not be stretched to include fees) nor the proposed additional term (which could not be derived from authority) assisted Mr and Mrs James.  They could also have led the court into the difficult position of trying to work out how an adjudicator would have exercised their very broad authority as to fees, which was not appropriate.

The court, therefore, held that it could not alter the adjudicator’s decision on fees.

Comments

While it may seem unfair to some, it has been established for some time that any order made by an adjudicator as to their fees cannot be challenged in court (or at least not based on an incorrect decision).  While a number of reasons have been cited for this, it is considered that the true reasons boil down to:

i. The court’s unwillingness to step into the shoes of an adjudicator and decide what they would have thought had a different set of facts presented themselves. Adjudicators have very wide jurisdiction to make orders for their fees, which are not restricted by who wins or loses a case.

ii. While this case was relatively simple, most cases are not. It would be very difficult to create a rule for cases where there was only one point in issue before the adjudicator and another for multi-issue disputes. In truth, even single issue disputes can revolve around several arguments so the distinction may become blurred very quickly.

iii. If the courts were to open up adjudicator’s fees decisions it would significantly increase the workload of the court. Any successful application may require cost assessments which would lengthen hearings and further stretch an already busy judiciary.

Given these points it is not entirely surprising that the court rejected the idea of reviewing the adjudicator’s decision on fees. However, it may be thought that Mr and Mrs James will be very unhappy about being dragged through a process that (potentially) RBH had no entitlement to commence, only to have to pay for that process at the end.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2025. Specific advice should be sought for specific cases. For more information see our terms & conditions.