Rupert Choat of Cameron McKenna explains
On Monday Multiplex and Cleveland Bridge completed a hard fought match, in which both teams’ players earned millions. Like many sporting contests it is subject to appeal.
For now, CBUK must repay £6m an adjudicator awarded previously (including interest). Unfortunately, the parties spent £22m in legal and experts’ fees identifying how much this corrective transfer should be.
The judgment blames the parties (as the order that CBUK, despite technically losing, should pay only about £1m of Multiplex’s costs confirms). They, in effect, forced the court to carry out a final account. The judge suggested the parties were made for each other. Multiplex adopted a “ruthless but lawful” policy of issuing negative interim certificates in breach of their contractual duty to consult, while CBUK withheld design information for two months after they left the site – conduct that was “certainly no less deplorable”.
This is extreme litigation, reminiscent of the BCCI case (costs: £100m) and Equitable Life (£50m), both over claims that were ultimately abandoned. They prompted much soul searching in the commercial court and case management changes are being piloted.
There may be pressure on the Technology and Construction Court to adopt some of these changes (such as restricting pleadings to 25 pages). Some are already in place (for example, limiting disclosure, not that that stopped the trial bundle comprising 550 files.
The judge adopted not only established practices to crack the case (such as preliminary issues) but also special post-trial hearings. It is a shame that after all his improvements to the TCC, this may be Sir Rupert Jackson’s last judgment (he is going to the Court of Appeal).
Parties, lawyers and courts might all learn from this case how to avoid and resolve disputes, but will it put people off litigating? I doubt it.