Fenice engaged JFC to design and construct five residential properties and a commercial unit in Camden, North London. There was an adjudication between the parties and the Adjudicator found in favour of Fenice, and directed that JFC should pay all of his fees (£23,235.63 including VAT).

JFC refused to pay the fees on the basis they were excessive. Subsequently JFC paid £5,000 plus VAT as that was what JFC considered to be a reasonable sum. As both parties were jointly and severally liability, the Adjudicator claimed the remainder of the fees from Fenice. Fenice accepted that the fees were reasonable and paid the balance as well as an amount in respect of the Adjudicator’s legal costs. Fenice commenced proceedings against JFC for these sums and its own legal costs.

Fenice claimed that: (1) Because the fees were ordered to be paid as part of the Adjudicator’s decision, the amount should be summarily enforced as would any other valid Adjudicator’s decision; (2) Alternatively, the Adjudicator’s fees can only be challenged on the grounds of bad faith by the Adjudicator, which JFC was not contending here; and (3) The fees charged were reasonable in any event.

The Judge held that the Adjudicator’s fees were reasonable and ordered JFC to repay the balance of the fees to Fenice on the basis that the fees charged were reasonable. In relation to Fenice’s first argument, the parties’ adjudication agreement either expressly or impliedly incorporated the provisions of the Scheme for Construction Contracts and therefore it was a term that the Adjudicator states who is liable for his/her fees. If the Adjudicator’s decision on fees was to be regarded in the same way as a decision on the issues in dispute, then this would not only make the decision on fees provisional and subject to a further final decision of a final tribunal, but could also mean that the Adjudicator would be entitled to whatever he decided.

The Judge also disagreed with Fenice’s second contention as bad faith is not the only ground on which to challenge an Adjudicator’s fees. A party could also challenge on the reasonableness of the fees, this right arises out of paragraph 25 of the Scheme.

The Judge acknowledged that whilst a party had the right to challenge an Adjudicator’s fees on the grounds of reasonableness, it would be hard for a party to do so successfully. However, the overall burden of proving reasonableness rests upon the Adjudicator. The nature of adjudication was that it is fast paced and an Adjudicator needs to analyse the issues and reach a decision in a short period. Whilst initially the Adjudicator has to provide a level of justification for the fees, such as the rate, the hours worked and a short narrative, the evidential burden will then be on the party challenging the fees to show that they are unreasonable. If a party fails to acknowledge an Adjudicator’s invitation to agree his fees any later complaint that the rate is excessive would be unlikely to provoke sympathy.

In the present case, Fenice had a right to recoup payment of its debt, as a party who was jointly and severally liable. The Judge analysed the fees incurred as against the submissions of the parties, and the shifting nature of the parties’ contentions, particularly those of JFC, and considered that the Adjudicator had only analysed and decided on issues that had been properly raised by one or other of the parties. Therefore the fees were reasonable and Fenice was entitled to recover the full balance.