Cleveland Bridge may appeal £8m Wembley stadium judgment

Wembley steel contractor Cleveland Bridge may seek to appeal the judgment in its epic High Court battle with main contractor Multiplex, which left it facing the prospect of paying out nearly £8m.

In a hearing at the Royal Courts of Justice on Monday, which had been expected to conclude the four-year row, Mr Justice Jackson ruled that Cleveland Bridge (CBUK) owed Multiplex £6,154,246.79 in damages for breach of contract, overpayments and interest. It had been seeking up to £25m, though damages were capped at £6m.

The judge also found that CBUK should pay 20% of the legal costs that Multiplex had accrued since the summer of 2006. This could amount to about £2m.

Judge Jackson criticised both parties for “bicycling over the edge of a precipice into an abyss” by continuing their wrangle in the courts, rather than settling privately. The first part of the trial, determining blame, concluded in 2006.

But despite the fact that the judge refused leave for either party to appeal, CBUK’s barrister Adrian Williamson indicated that the firm was keen to do so. It may now apply to the Court of Appeal to overturn the verdict.

Such a move, which is unlikely to grant CBUK much relief, would further prolong a case in which the legal costs have grown to dwarf the sum at stake. The parties have spent about £22m so far; the bill for photocopying alone has come to £1m.

In 2004 CBUK and Multiplex could have rapidly resolved their dispute but they freewheeled downhill towards a precipice

Mr Justice Jackson

The parties have until 4 November to lodge an application to the Court of Appeal. Roger Stewart, Multiplex’s barrister, said that if CBUK did not appeal, Multiplex would not contest the parts of the judgment that had gone against it. He said: “We rather think enough is enough.”

Judge Jackson said he had “never before seen parties so devoted to litigation for its own sake”. He said: “In 2004 CBUK and Multiplex could have rapidly resolved their dispute … [but instead began] freewheeling downhill towards a precipice.”

The dispute is one of a series of actions that the Wembley National Stadium project has given rise to (see box, right). The stadium was completed a year late in 2007 at a total cost of £757m, compared with an original guaranteed maximum price of £458m. The CBUK dispute centred on the steel specialist’s £60m subcontract for steelwork, including the stadium’s arch.

Multiplex claimed CBUK was in breach of its contract owing to delays and defective works.

CBUK argued that Multiplex was in breach because it revalued the work, deducted payments and failed to agree a new programme after design changes. It also accused Multiplex, now known as Brookfield Construction, of having an “armageddon plan” to force it out of business. Although Judge Jackson criticised the conduct of both parties, CBUK shouldered the bulk of the blame.

The dispute began in 2004, and this latest trial to decide financial penalties started in March this year. Multiplex has been awarded an interim cost payment of £700,000.