Fair’s fair: Adjudicator’s use of own ‘fair and reasonable’ rates did not offend against natural justice

In In Clegg Food Projects Limited v Prestige Car Direct Properties Limited [2025] EWHC 2173 (TCC), the Technology and Construction Court considered whether an adjudicator’s failure to consult with the parties before using his own ‘fair and reasonable’ rates to value Changes constituted a material breach of natural justice.

What happened?

Prestige employed Clegg under an amended JCT Design and Build contract for the construction of a leisure and retail centre in Bishop Auckland. A dispute arose over Payment Application 37, especially the value of eight Changes.

Clegg referred the matter to adjudication. In their submissions, both Clegg and Prestige put forward their valuation of items but accepted that if the Adjudicator did not accept their position, the Adjudicator could award such sums as he saw fit.

In valuing the Changes, the Adjudicator rejected both parties’ figures and applied his own ‘fair and reasonable’ rates based on his view of the work involved. Prestige refused to pay, claiming it was a breach of natural justice for the Adjudicator to use his own rates without first consulting with the parties and inviting their comments. Clegg applied for summary judgment to enforce the decision.

What did the Court decide?

The Judge enforced the Adjudicator’s decision.
Both parties had given the Adjudicator latitude to award such sums as he saw fit. This gave the adjudicator wide discretion to apply his own expertise.
Using that experience to arrive at a ‘fair and reasonable’ rate did not breach the rules of natural justice; the rate landed within the range of values proposed by the parties in any event.
Most of the Adjudicator’s rates actually favoured Prestige; and the value of two minor exceptions to this were simply not material.
The Adjudicator provided sufficient reasoning for his decision in his 88-page long decision.
There was no prejudice or outcome-changing injustice, and Prestige’s “granular and unrealistic” objections were insufficient grounds to derail enforcement.

What can we learn from this?

For adjudication to work as a quick, practical dispute resolution tool, adjudicators must have wide latitude to exercise their judgement within the remit given, without fear of granular post-mortems that make no material difference. Here, the court made clear that it will not unpick every methodological choice unless the adjudicator has plainly gone off on a frolic of their own.

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