John Cothliff Ltd v Allen Build (North West) Ltd 2

United Kingdom

The Scheme does give power to an adjudicator to award costs, analogous to his case management powers of the Scheme, alternatively as an implied term necessary to give business efficacy to the Scheme

HHJ Marshall Evans QC, Liverpool County Court

29 July 1999

J entered into a building contract with A. As the contract contained no express provision for adjudication, the Scheme applied. Upon a dispute arising, the adjudicator appointed made an award in J's favour. J also asked the adjudicator to determine payment of their costs of the adjudication, and the adjudicator awarded J 70% of its costs. A refused to comply with this part of the decision, and J issued an application for summary judgment.

A argued that the Scheme did not give the adjudicator the power to award costs, that this was a statutory power which would have to be given expressly and that there were public policy reasons for not having a power to award costs.

The court accepted J's argument that paragraph 13 of the Scheme was intended to be a sweep up clause giving general power to regulate and direct all matters relating to the adjudication procedure, and that this was wide enough to give the adjudicator a discretion as to whether it was appropriate to award costs. The court also believed that it would also be appropriate to imply a term into the construction contract that the adjudicator have power to award costs to give business efficacy to it.

Therefore, summary judgment was awarded to J.

As a County Court decision, this case creates no binding precedent, although it gave comfort to adjudicators who wished to award costs and a legal basis for costs to be sought. However, the reasoning of the court was subsequently disapproved in Northern Construction v J&J Nichol.

The Scheme does give power to an adjudicator to award costs, analogous to his case management powers of the Scheme, alternatively as an implied term necessary to give business efficacy to the Scheme.