5. Costs—jurisdiction—severance
See Enviroflow Management Ltd v Redhill Works (Nottingham) Ltd19
O’Farrell J held that an adjudicator did not have jurisdiction to award the unpaid party its “debt
recovery costs”, claimed under the Late Payment of Commercial Debts (Interest) Act 1998
(“LPA”). As such, she severed those costs from the adjudicator’s decision and enforced
the balance. The court considered the provisions of section 5A of the LPA 1998 (which
provides that a successful party is entitled to its reasonable costs of recovering a debt)
and section 108A of the Act, which, in contrast, provides that the costs of an adjudication can
only be awarded where such a provision was made in writing after the notice of adjudication
was given.
The court held that the provision in section 5A of the LPA was caught by and subject to section 108
A (2) of the Act and was therefore ineffective.
This article was originally written and published on the internet by Slater Heelis on 07/06/18.
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