At the moment there is no bill for court costs but action needs to be taken against defendants who insist on playing silly games and pile up court costs on the way
The judge, Peter Coulson QC, put it ever so politely. In a moment, I’ll be a little more candid.
He said: “It is not uncommon for this court to list an application for adjudication enforcement, only to be told shortly before the hearing that the application is not, in fact, contested. In such circumstances I consider that, prima facie, an order for indemnity costs will be appropriate.
“Defendants who avoid paying up in accordance with an adjudicator’s decision until the last moment or beyond are, so it seems to me, seeking to frustrate the adjudication provisions within the Housing Grants, Construction and Regeneration Act 1996, or, if it is appropriate, the adjudication scheme that might have taken its place in any given construction contract. In those circumstances, for the reasons I have given, it seems to me that, as a matter of principle, indemnity costs are appropriate.”
See what I mean by putting it politely? More bluntly: the court is utterly fed up with time-wasters. It’s high time that time wasters and their representatives were made to pay the pointless court costs they have incurred. Both should have to pay for court services and the judge’s wasted time. Ten grand should cover it. At the moment, there’s no bill for these.
Gray & Sons (Bedford) is the contractor for an industrial unit at Bedford. The customer is the Essential Box Company.
The two outfits fell out. An adjudicator, Ian Salisbury, decided the Essential Box Company was to blame. His award was that £102,000 plus interest was to be paid to the contractor by Essential.
That was in April. Come 12 September Essential still hadn’t paid, and Gray ran out of patience. An action began in the High Court to enforce Mr Salisbury’s award. Essential’s solicitors replied with “a variety of what might fairly be called technical points” said the judge. The essence of them was that the adjudicator had no jurisdiction, an argument that had been advanced during the adjudication itself.
It’s high time that time wasters and their representatives were made to pay the pointless court costs they have incurred
The hearing for enforcement was set for 11 October before Judge Coulson, but the day before, a note arrived saying that Essential Box did not oppose the contractor’s application to enforce.
But there was still a row about legal costs payable. Gray wanted “indemnity costs” rather than costs on the standard basis. This means any doubt about the amount is decided in favour of the payee. Sometimes it’s a signal by the court of disapproval of the way litigation has been conducted.
Judge Coulson awarded indemnity costs. He said: “In my judgment it was unreasonable for the defendant to continue to give the impression throughout that this application was resisted, thereby letting the claimant incur costs and obliging the court to make arrangements for a contested hearing, only to arrive at the position the day before the hearing that they would not, after all, be contesting the application. It seems to me that that is the sort of conduct, which, in the round, would ordinarily attract an order for indemnity costs. There is not, and has never been, any defence to these proceedings.” So, Essential was required to pay £12,000 in costs for Gray, as well as its own costs. But still, the court costs are unrecovered. This isn’t on.
Wasted costs do not start with wasted court time – they start within days of the adjudication. Jurisdictional challenges have become a big game. The foundation for resisting eventual enforcement starts then. For a long time I’ve rejected the idea that adjudicators should be allowed to decide jurisdiction points as a binding decision because that would make them judges in their own cause. Deciding to reject a challenge to the right to adjudicate has a financial benefit to the adjudicator but the risk of a biased decision is beginning to outweigh the huge wasted expenditure in enforcement proceedings.
It may be worth entrusting adjudicators to make binding decisions about jurisdiction after all. A binding decision on the right or otherwise to adjudicate made by the adjudicator will mean that the enforcement will not be interfered with by jurisdiction arguments. So, let’s ask the DTI to think about that in its review. As for clobbering those who waste court time with the costs – it’s high time for a debate.
Tony Bingham is a barrister and arbitrator