Bridgeway Construction Ltd v Tolent Construction Ltd [2000] LVO 99069, TC 14100

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The Court may enforce provisions in a contract ordering the party referring a dispute to adjudication to bear all costs and expenses relating to it. Such a provision does not breach the provisions of the HGCRA 1996.

Judge Mackay, Liverpool District Registry

11 April 2000

B was a groundworks sub-contractor engaged by T for works at a factory in Oldham. The sub-contract incorporated the adjudication procedure of the Construction Industry Council. However, T had amended this to state that the party seeking adjudication would be responsible for all costs and expenses related to the adjudication, whether or not it was successful.

B commenced an adjudication claiming that T owed it unpaid sums. The adjudicator awarded B a final account sum, less previous payments, of around £32,000. The adjudicator ordered B to pay the costs of B, on the basis that the sub-contract bound him to do so. T deducted £10,000 made up of legal and "management" costs from this award to cover its costs of defending the adjudication, and paid the sum of £22,000 to B.

B commenced proceedings to recover this sum. It claimed that the amended sub-contract was void because it breached the provisions of the Housing Grants, Construction and Regeneration Act 1996, since it attempted to bar the right to adjudicate, or was a deterrent term. The Court dismissed B's claim. The Judge held that the issue of costs was not part of the HGCRA, and therefore the amended sub-contract was valid. He also commented that B had entered the sub-contract freely, and could not try to alter the terms afterwards.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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