Adjudication in dispute over £11m redevelopment settled in construction firm's favour
Construction company Bovis Lend Lease has won a claim for more than £4m against the trustees of the London Clinic.
The dispute centred around an £11m redevelopment of a clinic at Devonshire Place in London three years ago.
Adjudicator Anthony Bingham had been called in to decide a dispute between Bovis and the clinic after the project overran by 58 weeks although architect Terry Farrell and Partners had only been granted a four week extension.
Bingham decided in favour of Bovis, and ordered the clinic to pay Bovis over £4m, plus the reimbursement of his fees which totalled almost £30,000.
Bovis then applied to the High Court for enforcement of the award, but the clinic contested the claim, raising issues over whether the adjudicator had jurisdiction, and arguing that he had not followed the rules of natural justice.
The completion date set for the project was June 2005, but practical completion was not achieved until August 2006, 58 weeks later.
Bovis made several applications for time extensions, but aside from an extra four weeks, these were rejected while quantity surveyor Davis Langdon allowed £150,000 for prolongation costs.
After the adjudication, the clinic complained it did not have enough notice of Bovis' claim, or an effective opportunity of replying, but the judge decided there had been no breach of the rules of the natural justice.
During the adjudication, the clinic failed to complain it had not had enough time to put forward its case. But Mr Justice Akenhead threw out the clinic's claims there had been an “ambush”, adding that the clinic had not raised this topic at the hearing or in written pleadings, despite being represented by well known solicitors and counsel.
He ruled that the adjudicator had jurisdiction to decide the dispute, and dismissed the clinic's claims of severability.
The judge also upheld the adjudicator's award granting a time extension of 44.2 weeks to Bovis, and upheld his order that the clinic should reimburse Bovis' liquidated damages for the time extension, and interest.
Bovis had been forced to pay liquidated damages of £40,000 a week for just over a year after the project overran, but is now looking forward to repayment of more than £4m.