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CRS raises the stakes by taking its case to the House of Lords

legal matters

Forget the discussion about the people's peer - CRS v Taylor Young (2000) is going to the House of Lords. This is extraordinary for any number of reasons, not least because it is a building case and the highest court in the land is not terribly interested in building cases.

It is true that many of the leading cases on contract and tort started off as ordinary building cases. A good example would be a case such as Mr Murphy's complaint against Brentwood District Council that the council failed to ensure that the plans for his house would result in a building that would hold together, rather than fall apart.

Similarly, the dispute between developer St Martin's Property Corporation and contractor Sir Robert McAlpine, in which the contractor took the clever view that because St Martin's had transferred the property and assigned the benefit of the contract to a sister company before the works were completed, it suffered no loss, and the sister company - which had inherited a defective building - had no contract with the contractor and therefore had no right to bring a claim.

These cases started off in the Technology and Construction Court and were decided on the basis of the law as it was then understood. They ended up in the House of Lords, where their lordships were obliged to rewrite the law to ensure that policy and some form of justice prevailed. But these were cases that concerned the widest of legal principles.

The CRS case concerns the insurance provisions of the JCT contract and the legal consequences of the simple fact that during the contract the employer and contractor are jointly insured against risks such as fire, whereas the professional team are not. Regular readers will know that the design team has, so far, been unsuccessful in its attempts to claim a contribution under the Civil Liability (Contribution) Act l978 from the contractor which built CRS's new headquarters towards the cost of remedying substantial fire damage and subsequent losses (AJ 3.7.00). The contractor successfully argued that it could only be required to make a contribution if it was liable to CRS for the damage, and as both employer and contractor had the benefit of joint names insurance to cover these very losses, there could be no question of the contractor being liable for them.

If the Court of Appeal declines to give the disappointed party permission to appeal, it must petition the House of Lords direct. An appeal committee then considers the matter and decides whether the case raises an arguable point of law of general importance. It should be borne in mind that the law lords are very senior judges whose background is predominantly in complex commercial disputes, not construction cases.Conversely, many of the cases that go to the Lords are tax cases, involving issues of general importance and, coincidentally, large sums of government money.The fact that questions involving the interpretation of the JCT standard forms have traditionally not struck the appeal committee as worthy of their lordships' attention has been considered by some as something of a scandal.

Commentators such as Ian Duncan Wallace have lamented the Lords' failure to put right some of the more serious mistakes made by the Court of Appeal in cases such as Crown Estates v Mowlem (l994), where they held that a final certificate was conclusive evidence that the work had been carried out in accordance with the contract and precluded a claim against the contractor for latent defects. It is quite a coup, therefore, for the design team in the CRS case to bring the case this far.

The House of Lords may be the highest court in the land but it is also one of the strangest. The judges sit in the Palace of Westminster. The hearings are held in large bright committee rooms, decorated with more than a hint of Pugin. Barristers are robed as always but the five law lords turn up in their lounge suits and sit around a table.

Most extraordinarily, the ushers, who are usually seen scurrying about a court room in a black gown with books and papers and snoozing throughout the afternoon's proceedings, wear white tie.

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