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A tale of participation…!

With Adjudication, there are always risks at various levels, for example if the other party does not participate in the Adjudication or he becomes insolvent before settling his liability to the Adjudicator, which you remain unaware of.

The Christopher Michael Linnett v Halliwel LLP case revolved around the non-participation of the other party and their subsequent liability for the Adjudicator’s fees. The defendant had asked that the Adjudicator withdraw or, alternatively, adjudicate on the merits of the case. Given this alternative and the fact that the Adjudicator proceeded to make his decision on this basis, this gave rise to a contract between these parties and hence the defendants were liable for his reasonable fees and expenses. However, within the decision were words of warning that had the defendants not given the alternative with a valid jurisdiction al challenge and then failed to participate in the Adjudication, then the defendant would likely have not been liable for the reasonable fees and expenses of the Adjudicator.

The warning is clear that given the "joint and several" liability of both parties, if the other party acts to avoid the Adjudicator's fees then you may become liable for them and, further, any settlement agreement based on an agreement between the parties must incorporate this within the wording of the agreement.

Author: Jonathan Nugent

Managing Director - Arbicon ADR Ltd, Chartered Quantity Surveyor, Construction Adjudicator, Arbitrator, Mediator, Expert Witness/Reports/Determination, Lecturer, Delay and Loss Analyst, Leading Authority on Construction Contracts/Law, Commercial Construction Contract Solutions and Dispute Resolution.