In Sleaford Building Services Limited v Isoplus Piping Systems Limited, a dispute between the parties had been referred to adjudication at which it was found that Sleaford should pay Isoplus £323,502.32.
Following the passing of the deadline for payment, and being on notice that Sleaford would contest the decision, Isoplus made an offer to settle for the precise amount awarded by the adjudicator.
A few days after the offer was made, Sleaford issued a claim seeking a declaration that the adjudicator’s decision should not be enforced. Shortly after, Isoplus issued a separate claim to enforce the decision.
The two claims were heard together. The court dismissed Sleaford’s claim, and gave judgment for Isoplus, enforcing the adjudicator’s decision together with interest, in the sum of £326,586.60.
The offer
The court had to consider whether the sum awarded was better than Isoplus’s offer, made under Part 36 of the Civil Procedure Rules, because, under that Rule, if a party obtains judgment which ‘beats’ its offer it will be entitled to:
- its costs being assessed on a more favourable basis;
- interest at up to 10% above base rate on costs and on the sum awarded;
- an additional amount of damages (up to a maximum of £75,000).
The decision
The court did not allow these uplifts because it found that the offer was not a genuine attempt to settle the proceedings. The court noted that at the date of the offer, Isoplus offered to forego just ten days of interest which, having a monetary value of £350, was just 0.1% of the claim.
Had the court allowed the uplifts, Isoplus would have received an additional amount of damages of over £32,000 plus ‘special-rate’ interest and indemnity costs.
The takeaway
Isoplus’s offer to accept 99.9% of the claim was found not to be a genuine attempt to settle. The Judge commented that the offer was not much of a concession at all, noting that claims to enforce adjudicators’ decisions tend to produce “all or nothing” outcomes. Therefore, in adjudication enforcement cases, should a party wish to obtain the Part 36 uplifts, a more significant concession will be needed to achieve that outcome.
Berry Smith is regularly instructed in enforcing, resisting or challenging Adjudication awards. Should you wish to discuss this with our construction team, please do not hesitate to contact us on 029 2034 5511 or at disputeresolution@berrysmith.com
Tel – 029 2034 5511
