Christopher Linnett Ltd v Harding (t/a M J Harding Contractors)

[2017] EWHC 1781 (TCC)

Here, the Claimant adjudicator sought payment of statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 which had accrued during the period of delay in settling the payment of his fees, statutory compensation and debt recovery costs.  The adjudicator was successful on all fronts.

Harding had argued that it was not a party to the adjudication agreement.  He had not concluded an adjudicator’s agreement and the only relationship he had with Mr Linnett arose out of the obligation on the part of the adjudicator to comply with the Scheme. The Judge, Mr Nissen QC, disagreed. The Defendant, as evidenced by the various communications and exchanges, agreed to and did in fact participate in the adjudication process (albeit without prejudice to his jurisdictional objections) and he had, therefore, by his conduct, requested the adjudicator to adjudicate on the dispute. It was the adjudicator’s terms which applied. Once the terms had been sent out, it was for the Defendant to say that he did not accept them. Otherwise the conduct which formed the basis of his acceptance of the offer would be conduct on those terms.

The purpose of the Late Payment Act was to provide businesses with a right to statutory interest which they would not otherwise have had. The Late Payment Act did apply to the adjudicator’s agreement not only because the Defendant was acting in a business capacity but also because he concluded it in the course of a business. It was a commercial transaction. Accordingly, the fees claimed by the adjudicator were a qualifying debt of the Late Payment Act. Further, the adjudicator’s terms included the right to recover the reasonable costs of recovering the debt in accordance with the 2013 Late Payment Regulations and so the adjudicator was entitled to recover the time spent in pursuing recovery of the overdue sums.

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