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CONSTRUCTION PARTNER DAVID BROWN DISCUSSES HOW TO GO ABOUT RECOVERING MONEY IF THE OPPONENT DOES NOT PAY

By David Brown, Partner

What happens if you have succeeded in an adjudication in a construction-related claim and been awarded a sum of money – but the opponent hasn’t paid up? How do you go about recovering this money?

Firstly, the Technology and Construction Court (TCC) takes a very robust approach to enforcing adjudicators’ decisions and your solicitor should write to the opponent explaining this and demanding payment immediately. If this fails, the opponent should be warned that court proceedings will be issued to enforce and such proceedings will include a claim for not only interest but also legal costs. Unlike adjudication itself, legal costs are recoverable when applying to the Court to enforce.

The TCC has developed the procedure for enforcement which is set out in Section 9 of its Guide. It has a rapid procedure for enforcement aiming to list a court hearing within six to eight weeks.

For a money claim, your solicitor will prepare a Claim Form under Civil Procedure Rules (CPR) Part 7, together with an application notice for summary judgment under CPR Part 24. They will lodge this with the Court together with the Claim Form, Particulars of Claim, Notice of Application to request an abridgement of time, and a Witness Statement in support of the claim form and notice of application.

The TCC will deal on paper within three working days and give directions concerning the defendant filing an Acknowledgement of Service and evidence and the date for hearing.

There will be a physical court hearing and your representative will request summary judgment and the Court will decide whether to enforce. The TCC’s approach is to uphold adjudicator’s decisions, unless the adjudicator plainly had no jurisdiction or there was a material breach of the rules of natural justice.

The TCC will not interfere with an adjudicator’s decision if the adjudicator has made an error in procedure, fact or law. This reflects the ‘rough and ready’ nature of adjudication. The adjudicator may give the wrong answer but as long as they have answered the right question, the decision is usually enforceable.

Although the Court has absolute discretion as to costs, the winning party is usually awarded costs and sometimes on an indemnity basis – a more stringent costs order – if the grounds for challenging enforcement raised by the defendant were unjustified or unarguable. The costs are usually summarily assessed at the hearing.

There is likely to be a shortfall in costs awarded and costs incurred but for this type of action, not a substantial one, unless the solicitor incurs obviously disproportionate fees. The amount of costs incurred will vary from case to case and depend upon the legal advisors used, who should give an estimate beforehand. The court fee will be 5% of the amount of the claim, subject to a maximum of £10,000 plus the summary judgment application fee of £275.

If successful, the enforcing party will then have a judgment which it can enforce in a number of different ways.

If you are considering commencing an adjudication or you have already been successful and wish to enforce the decision, please do not hesitate to contact David Brown on email: dcb@cooperburnett.com or telephone: 01892 515022.

This blog is not intended as legal advice that can be relied upon and CooperBurnett LLP does not accept any responsibility for the accuracy of its contents.

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April 26, 2023
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