The Board of Trustees ("the Museum") employed AEW ("the Architect") in the construction of the new Museum of Liverpool. Issues arose during the works, and the Museum brought proceedings against the Architects.
The Architect admitted liability for certain issues prior to the trial but brought in PIHL ("the Contractor") as a third party with regard to other issues.
The Technology and Construction Court held that the Architect had failed to discharge its contractual responsibilities to the Museum in respect of elements of design and inspection. The Contractor was ordered to pay a contribution of 25 per cent for common damages for issues relating to concrete cover.
Of most interest in the judgment however was the Museum’s claim for the costs incurred in connection with an earlier adjudication that had been initiated by PIHL. Ordinarily, parties bear their own costs of adjudication. However, in this case the Judge held that the adjudicator, legal and expert fees incurred in the adjudication were recoverable from the Architect.
The Judge explained that:
- It was reasonably foreseeable that the circumstances of this case would have led to an adjudication between the Museum and the Contractor;
- A sufficient causative link existed between the Architect’s breach of contract and the adjudication; and
- The only break in causation would have been if the Museum had acted unreasonably, or if the Museum's legal advisors had advised them negligently.
The Architect’s expert was described by the Judge as "almost wholly unimpressive" and as having "given little or no coherent thought to the issues in the case". The Judge also noted that the Architect's expert had not been asked to consider what could reasonably be expected of architects in AEW’s position, something he found extraordinary in a case involving allegations of professional negligence.
The most interesting aspect of this judgment concerns the award of the costs the Museum incurred in the adjudication. Traditionally, costs of adjudication are not recoverable, but this will now change, at least where it can be shown that it was reasonable for a claimant to adjudicate and there is a causal connection between the adjudication and the breach. The judgment is even more notable because AEW was not even a party to the adjudication, but still had to bear the Museum’s costs of it.
Will this now lead to increased litigation? Maybe. Parties who have previously been left out of pocket by adjudication, may now feel that there is a chance of recouping their losses in subsequent proceedings. It would be a wise claimant who ensures that they keep a complete record of all the costs they incur in the adjudication.
This judgment is also useful in reminding us of the importance of choosing and instructing experts carefully. Have they acted as an expert before; do they have expertise in the appropriate field; how will they come across in a witness box. This case teaches us that it is not just an expert’s written evidence that is important but how they present it, and how they deal with challenges to it. As ever, the key to success lies in proper preparation.