Buildability Limited (“BL”) was employed to design and build a landmark building in Birmingham. O’Donnell Developments (“ODD”) was engaged to carry out ground works, drainage and concrete frame works for the development. The sub-contract incorporated the DOM/2 standard form, although it was heavily amended. The parties later entered into a supplemental agreement.

 

Seven adjudications were completed. The same adjudicator decided adjudications 4 and 7. In adjudication 4 he decided that even though ODD had failed to comply with the notice periods in the contract this did not preclude any entitlement to an extension of time. He also decided ODD was not obliged to follow the programme referred to in the supplemental agreement in calculating an extension of time. In adjudication 7 he stated that the supplemental agreement did not settle the claims for extensions of time in respect of the 3 delay events occurring prior to the supplemental agreement.

 

BL commenced Part 8 proceedings seeking 3 declarations. BL then entered into a conditional fee arrangement (“CFA”) with its solicitors in which there was to be a 100% mark-up on the solicitors’ fees in the event of success.

 

ODD subsequently issued an application to set aside the order. BL sought to have the claim dismissed, or alternatively to have it continue as if the Part 8 procedure had not been used; directions were sought to permit the claim to proceed as a Part 7 claim.

 

The judge stated that, of the three declarations sought, only one was capable of being pursued in Part 8 proceedings. The other two had problems as they were drafted without sufficient clarity and would need contested evidence and/or factual analysis. BL was invited to amend its declarations and it did so.

 

After submitting an amended claim form there was a period in which the parties sought to agree the wording of the declarations. Once they did, a consent order was lodged at the court.

 

In this judgment the judge had to consider the position on costs:

 

1           Which side (if either) should pay them?

2           How should the costs of ODD’s application be dealt with?

3           Should the costs be dealt with on a summary basis?

4           Should the conditional fee be allowed, in part or at all?

5           And, if the court summarily assessed the costs, to what extent should they be marked down?

 

The judge decided:

 

1           The general rule in CPR 44.3(2) was that the unsuccessful party should pay the costs of the successful party. As BL had secured two declarations of value it was broadly speaking successful. Therefore it should be entitled to its costs.

2           However, ODD had had a measure of success at its application hearing. Though it did not secure the orders it had wanted, BL did have to go back and amend the declarations sought. Therefore no costs order would be made with regard to ODD’s application.

3           This was an obvious case for costs to be assessed on a summary basis. There was no hearing and finality sooner rather than later as to who was to pay the costs was important.

4           It was wholly inappropriate for BL to recover a conditional fee. This was partly because BL had not entered into the Pre-Action Protocol before commencing Part 8 proceedings, although it was not compulsory for Part 8 matters relating to subjects that are substantially the same as those in a recent adjudication.

5           The costs claimed (£46,690) were disproportionately high for the simple legal points at issue in the proceedings, which were resolved within about 5 weeks of the letters before action.