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GOING TO THE WIRE

LEGAL

Love it or loathe it, adjudication is nothing if not a seat-of-the-pants experience, writes Kim Franklin. The combination of the truncated time frame, the procedural freefor-all and the compulsive tendency to put as much material as possible before the adjudicator, leads to a situation which strongly favours the 'have-a-go' claimant.

A claimant who believes, rightly or wrongly, that they have lost out, can bamboozle the defendant and the adjudicator with a dazzling array of documents, statements, schedules and whizzy charts, all leading inextricably to a big, juicy bottom line. There is barely time to assimilate all this information and no time at all to test it. Calls for clarification can quickly descend into unseemly squabbles about whether the witnesses are simply to be questioned or, heaven forbid, cross-examined.

An unsuccessful claimant loses nothing more than their own costs. If they are successful, and they usually are - it takes a brave adjudicator to find that the claimant's vast smoky edifice has been generated without even a glimmer of a fire - they have an adjudicator's decision in their favour. The defendants may not like the decision and they may not actually want to pay up, but these days an adjudicator's decision is as good as cash in the bank and you ignore it at your peril.

This point was strongly reinforced by the Technology and Construction Court in Gray & Sons Builders (Bedford) Ltd v Essential Box Company Ltd (Judgment 11.10.06). RIBA adjudicator Ian Salisbury decided that the defendant had wrongly repudiated its contract with the claimant builder firm, which was therefore entitled to compensation of £115,500.

But the defendant did not pay up . Instead it took what the judge described as 'a variety of technical points' and gave the appearance that it resisted the enforcement proceedings.

On the day before the hearing, the defendant conceded that it did not oppose enforcement, but objected to paying the claimant's legal costs. The judge reiterated that the proper course for an unsuccessful party was to pay the amount which had been ordered by the adjudicator and argue about it in legal or arbitration proceedings later.

He pointed out that it was entirely unreasonable for the defendant, who ought to have known that it had no reasonable defence, to give the impression that the enforcement had been resisted.

Defendants who avoid paying up until the last moment or beyond are trying to frustrate the statutory adjudication provisions, and therefore should be penalised with indemnity costs. The lastminute offers by the defendant to defer payment by instalments were irrelevant in this case.

Ultimately, save for the odd taxi fare, the claimant was entitled to judgment for £115,500 and to be indemnified for its full legal costs of £12,500.

The moral of this story is: don't take the enforcement of an adjudicator's decision to the wire. Pay up and argue later, or it will cost you.

Kim Franklin is a barrister and chartered arbitrator at Crown Office Chambers in London. Visit www.crownofficechambers. com

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