A & V Building Solution Ltd v J & B Hopkins Ltd

Citation: [2024] EWHC 2295 (TCC)

Background Facts​

• The dispute arose from subcontract works on a major project. A & V sought payment for measured works, variations, and other losses.

• Previous judgments had already resolved most substantive liability issues in A & V's favour, awarding them over £100,000.

• This judgment focused on adjudicators’ fees, interest, and related cost issues following the substantive judgment delivered in June 2024.

​Judgment

• Adjudicators' fees:

  • A & V sought recovery of full adjudicators’ fees. The court upheld a prior decision limiting recovery of one adjudicator's fee (Mr Blizzard) to £17,400.

  • Regarding Mr Smith’s fees (previously paid by A & V after losing an earlier adjudication), the court held that these fees could not be reopened or reallocated now, in line with established case law (Castle Inns and TSG Building Services cases).

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• Interest awards:

  • Interest was granted on different sums at different rates:

    • Measured works claim: Statutory rate under the Late Payment of Commercial Debts (Interest) Act 1998 (8% above base rate), as clause 12 did not provide a "substantial remedy" to oust statutory interest.

    • Loss of profits damages claim: 4% over base rate, not the contractual rate.

    • Adjudicator fees: 4% over base rate.

  • Interest dates were carefully determined for each head of claim.

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• Contractual interest clause:

  • JBH argued that clause 12 of the subcontract excluded statutory interest. The court rejected this, finding that clause 12 did not provide a substantial remedy and so could not oust statutory rights under the 1998 Act.

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• JBH’s claims:

  • JBH was entitled to some interest on its own enforcement costs and Mr Smith’s fees under prior judgments.

General Principles Developed

• Finality of adjudicator fees allocation:

  • An adjudicator’s decision on apportioning their own fees is final and cannot be reopened even if the substantive decision is later overturned or varied. This follows Castle Inns, and is consistent with other TCC authority.

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• Conditions for ousting statutory interest:

  • For a contractual interest clause to displace statutory interest under the Late Payment Act, it must provide a "substantial remedy." Courts will examine factors such as bargaining power and whether the clause genuinely deters late payment.

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• Interest on damages vs debts:

  • Damages (e.g., for loss of profits) do not attract statutory late payment interest; only debts arising from an obligation to pay the contract price do.

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• Separating different interest rates and periods:

  • The judgment reinforces that interest awards must be precisely matched to individual claims, rates, and periods, rather than a single blended approach.

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• No retrospective claim without proper pleading:

  • The court refused to allow A & V to retrospectively amend their claim for adjudicator fees, emphasizing procedural discipline.

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