The following Construction practice note provides comprehensive and up to date legal information covering:
Produced in association with 4 Pump Court
This Practice Note looks at the ability of an adjudicator to make provision for one party to bear the legal costs (in whole or in part) of the other party, referred to below as ‘party costs’. It also considers the ability of a party to recover its party costs under the Late Payment of Commercial Debts (Interest) Act 1998 (LPCD(I)A 1998) or as a claim for damages.
In relation to an adjudicator’s fees and expenses, see Practice Note: An adjudicator's fees and expenses.
In general, the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) (as amended by the Local Democracy, Economic Development and Construction Act 2009 (LDEDCA 2009)) seeks to prevent parties agreeing contractual terms which place all the costs risk on one party.
HGCRA 1996, s 108A renders ineffective any agreement by the parties as to liability for party costs subject to a very narrow exception—parties can agree terms which concern the allocation of costs if the agreement is:
in writing, and
reached after the notice of intention to refer a dispute (also known as a Notice of Adjudication) has been given
For the position under the HGCRA 1996 as originally enacted, see Position in respect of contracts entered into prior to 1 October 2011 below.
As noted above, HGCRA 1996, s 108A provides that the parties can
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