Step right in

The judge in AWG Construction Services Ltd vs Rockingham Motor Speedway Ltd has turned that sign around on the court door. You know the one I mean: one side says "Hello, come in, open", the other side says, "Go away and sort your disputes somewhere else". He is open for business. Snag is, there's an awfully good competitor down the road called Adjudications R Us, so he's had a bit of a prod at that.

Fair dues, though: the judge admitted that six years ago, the courts were in a mess. "There were," he said, "significant delays in the courts". Er, hmmm that's putting it mildly. Lord Bingham, who was at the time the most senior judge in the civil courts, put it a fraction more seriously. He described the expense of litigation as "a cancer eating at the heart of the administration of justice". On top of that the lord chief justice, Lord Woolf, said that a number of business people had told him that it was often cheaper to pay up irrespective of the merits of a case rather than to defend the action in the courts. Well, if all that is behind us, let's get stuck in to a bit of juicy legislation.

AWG and Rockingham got adjudicating, but it went wrong. So did 10 or so other adjudications last year. That's about 10 out of 2000. Rockingham is that new motor speedway track in Northamptonshire. AWG, formally Morrison Construction, was the design-and-build contractor for the racetracks and grandstand, underpasses and tunnels. Something caused seepage of water through the track surface. There was disruption at the first race meeting and Rockingham obtained £123,000 in an adjudication. Later, AWG claimed £400,000 in a second adjudication and won that. Rockingham refused to pay. Come 1 October last, Rockingham began a third adjudication. It is that one that is the subject of the recent judgment. The adjudicator awarded £1.8m to the claimant. But the judge would not enforce that decision; he said the procedure went wrong. It became technically unfair, in the eyes of the judge.

Here's what happened. Rockingham made the statement of claim. In reply, AWG said the statement contained new arguments and so was difficult to reply to. Rockingham said its referral did not contain new material or new arguments at all. By now, of course, damn near half of the 28-day timetable had slipped by. So AWG served its response of 147 pages under protest.

The adjudicator awarded £1.8m to the claimant. But the judge would not enforce it; he said the procedure went wrong

What a pity that the matter wasn't put on hold to allow time to consider the alleged fresh stuff in the referral. By doing that, the respondent would have had no complaint. Hindsight! Then there was a Rockingham reply to the response. Then one of the expert witnesses wrote a "commentary". Then AWG complained about more new stuff while sending in an 87-page response to the reply to the response. Then Rockingham put in an 86-page reply to the response to the reply to the response (phew, are you keeping up?). Then there was another commentary by the expert and 90 pages of evidence. Then there was an 11-page response by AWG. Then the poor old adjudicator had four days to come up with a decision. And he did. He awarded £1.8m to Rockingham.

I don't think the judge was pulling anyone's leg when he said: "I must start with an expression of admiration that he [the adjudicator] was able to produce such a reasoned decision of 30 pages in what was in effect three related but separate disputed adjudications in such a short time." The analysis of the toing and froing found that Rockingham had "widened the issues" and turned it into a different dispute. And by adopting new matters and new claims, which AWG did not have enough time to respond to, that was unfair on AWG. The cynic might suggest the adjudicator simply could not reach a sound decision in the few days he had left.