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Galliford Try and Lanes' legal saga moves to court of appeal

Judge to consider closing “pick your own adjudicator” loophole

Galliford Try and Lanes Group are to resume their legal battle in the Court of Appeal on 7 December, when judges will decide who picks up the tab for the multimillion-pound dispute.

Lord Justice Aikens has granted Lanes Group leave to appeal the 19 April judgement handed down by Justice Akenhead, which legal experts warned could pave the way for contractors to pick their own adjudicator.

Mr Akenhead ruled Lanes had failed to prove Galliford Try Infrastructure was in repudiatory breach of contract in challenging the appointment of an adjudicator.

A repudiatory breach is one allowing the innocent partner to terminate the contract.

Handing down the order to grant an appeal, Mr Aikens said: “In my view, all the points raised in the grounds for appeal have a reasonable prospect of success.”

Mr Akenhead acknowledged in his judgement at the time that the case highlighted a gap in the law which could lead to “abuse of the contractual and statutory process.”

Both parties have been granted leaved to appeal a second judgement handed down by Justice Waksman on 23 August, when he ruled in favour of Lanes on the grounds of bias and decided not to enforce a £1.36 million award for GTI previously issued by adjudicator Mr Daniel Atkinson.

The original subcontract between Lanes and GTI, signed on 13 May 2008, was described as the “removal of existing roof and re-roofing and glazing” at Inverness Train Depot. The contract sum was £819,367.

According to Lanes’ original claim form, GTI terminated the contract in April 2009.

Lanes sought damages of £1.6m plus costs and interest for the value of outstanding work and wrongful termination of the contract.

GTI’s solicitors served on Lanes a Notice of Adjudication claiming £2.7m for repudiating the subcontract. Adjudicator Mr Atkinson found in favour of GTI and awarded them £1.36m in May.

Mr Justice Waksman ruled against enforcing the award in August. The appeal court will now hear both parties on the grounds of repudiation, abandonment, service of documents pursuant to the 1997 ICE Procedure and the apparent bias of adjudicator Mr Atkinson.

Should Galliford Try win the appeal on all grounds, they will see the original £1.36m award enforced and Lanes will be forced to pay their entire costs. If Lanes is successful on the grounds of repudiation, abandonment or service of documents, its costs will be paid by GTI and the £1.36m award will not be enforced.

Galliford Try has already paid the £105,489.90 fees for Mr Atkinson’s adjudication.

A separate arbitration is currently proceeding between the parties with Mr Justice Ramsey sitting as sole arbitrator.

Lanes commercial director Scott Norris said: “I’d have thought the most sensible and least costly option was to agree a realistic timetable and reach finality through an arbitration.

“I thought that is what we had agreed to do. I cannot understand what benefit there is to getting an interim non-binding decision two years or so after the event, on a final account and during a parallel arbitration.”

GTI declined to comment.

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