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

An adjudicator’s agreement may arise by conduct where a party participates in an adjudication and thereby requests the adjudicator to act, even while maintaining a jurisdictional objection. The agreement will ordinarily be with the individual appointed to perform the adjudicator’s personal professional services unless the parties clearly intend to contract with a different legal entity. Terms supplied before participation may form part of an agreement concluded by conduct; silence alone does not constitute acceptance, but silence may be relevant to construing the conduct. The Late Payment of Commercial Debts (Interest) Act 1998 applies to a commercial contract for adjudication services where the purchaser acts in the course of a business. A degree-of-regularity test developed under consumer-protection legislation should not be imported into that Act.

The defendant, a building contractor, participated in an adjudication concerning a building contract. The adjudicator, Mr Linnett, supplied terms of engagement providing for fees, joint and several liability, interest, compensation and recovery costs. The defendant maintained jurisdictional objections but participated and did not object to those terms.

Mr Linnett and his company claimed statutory interest, compensation and debt-recovery costs after the defendant paid his share of the adjudicator’s fees late. The company was joined as a second claimant during closing submissions. The central issues were whether the defendant had entered into an adjudicator’s agreement, with whom it was made, what terms applied, whether the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 gave a cancellation right, and whether the late-payment legislation applied.

1. Amendment. The court permitted the late amendment joining Mr Linnett as a second claimant, but refused permission for the wider proposed contention that payment under a contract with him was due to the company. The lack of disruption and prejudice, the small value of the claim and proportionality justified the limited amendment.
2. Agreement by conduct. Applying Linnett v Halliwells LLP [2009] EWHC 319 and Fenice Investments Inc v Jerram Falkus Construction Ltd [2011] EWHC 1678, participation in the adjudication and requests that the adjudicator act established an adjudicator’s agreement by conduct. The defendant’s jurisdictional reservations did not prevent that conclusion.
3. Contracting party and terms. The agreement was with Mr Linnett personally. The adjudicator’s function was personal, the nomination named him, and the correspondence and terms used the first person singular. The agreement was concluded on the supplied Terms of Engagement. Silence did not itself amount to acceptance, but the defendant’s participation, against the background of those terms and without objection, showed that the services were requested on them. An express objection to a particular fee would have left only a reasonable fee as an implied term.
4. Cancellation. The defendant was not a consumer because the adjudication services were obtained wholly or mainly for purposes within his building business. Nor was the agreement a distance contract: it was not concluded under an organised distance sales scheme, and the RICS was not a party to it. The cancellation notice was ineffective.
5. Late-payment legislation. Clause 9 incorporated interest in accordance with the Late Payment of Commercial Debts (Interest) Act 1998, rather than making the Act apply where its statutory conditions were absent. The agreement was nevertheless a commercial contract and the defendant acted in the course of a business. The court declined to import the degree-of-regularity approach from consumer-protection authorities. Interest ran on the VAT-inclusive qualifying debt. The defendant owed £283.88 interest, £100 compensation and £1,469.50 recovery costs.
6. The company’s claim was dismissed. Judgment was entered for Mr Linnett for £1,853.38, together with any VAT payable on the interest and compensation sums.

First-instance decision. The judgment itself records no earlier decision in this action.