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Lanes makes bid for Supreme Court following appeal verdict

Lanes Group will make an application to the Supreme Court to hear its case against Galliford Try after a Court of Appeal verdict last month left the subcontractor facing interim costs of more than £1.5 million.

The company wants the country’s top judges to consider the issue of “forum shopping” and bias amid fears the appeal court’s decision opens the door for referring parties to pick their own adjudicator.

After the ruling, Lanes Group commercial director Scott Norris told Construction News: “We have read the Court of Appeal judgement and are both intrigued and surprised by the court’s decision that a referring party now has an advantage over a responding party, in that it can choose the adjudicator that it best thinks will give it the result it desires.

“It will be interesting to see what the Supreme Court makes of this.”

The ruling is the latest in a long-running legal saga relating to a £819,367 subcontract for roofing works to a traction maintenance depot in Inverness, Scotland, in 2008-09.

Legal commentators have since warned that the judgement, which effectively allowed Galliford Try to seek a new adjudicator after refusing to work with the first over fears of bias, could have long-term implications for adjudication.

Bill Barton, the senior partner at Barton Legal, the firm representing Lanes Group, described the decision as “surprising” and warned that it set a “very worrying precedent in that it gives a green light to forum shopping”.

“It will be interesting to see what impact it has on the industry and the adjudication of disputes in the future,” he said.

“Although intended to restrict the ability of parties to litigate over adjudication proceedings, it may well have the opposite effect,” he added.

Speechly Birchham’s group head of construction and engineering Steven Carey agreed that the judgement effectively green-lights the practice.

He said: “It seems inherently unfair that a party can commence adjudication and then take a view as to whether the nominated adjudicator is more likely to find in their favour. The other party has no such veto.

“Nominating bodies may wish to consider whether they will re-nominate the original adjudicator in such circumstances.”

Julian Bailey, construction specialist at law firm CMS Cameron McKenna, said there were differing opinions in the legal profession as to whether “adjudicator shopping” should be permitted.

The court’s judgement, written by Lord Justice Jackson, said that “forum shopping is never attractive” but rejected Lanes’ claims on the grounds that there are a number of circumstances in which parties should be allowed to restart adjudication.

The Court of Appeal also overturned a previous ruling in Lanes’ favour that found the adjudicator’s issuing of preliminary findings in breach of apparent bias.

The decision means Lanes must pay the £1.36m awarded to Galliford Try by the original adjudication, plus costs and interest.

A separate arbitration, in which Lanes claims around £2m in damages for wrongful termination of contract, and Galliford Try claims £2.7m for breach of contract, is ongoing.

Galliford Try declined to comment.

 

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