Hyder Consulting (UK) Ltd V Carillion Construction Ltd

The adjudicator's failure to allow it to comment on his methodology and the figures he proposed to use in arriving at his valuation of the target cost did not amount to a breach of the rules of natural justice.
 
 
 

HYDER CONSULTING (UK) LTD V CARILLION CONSTRUCTION LTD
Technology and Construction Court
Edwards-Stuart J
13 July 2011

 

The dispute concerned the amount of fees, if any, to which the engineer was entitled by reference to the proper amount for disallowed costs. There was a further dispute about whether the concept of target cost remained applicable. The adjudicator held a meeting between the parties at which each party was asked to provide details relating to the target cost and any agreed uplifts by reference to consolidated numerical data relating to resource costs to enable him to reach a conclusion about the value for the target cost. The adjudicator in his decision made findings as to the values of the disallowed cost, the target cost, the engineer’s payment application and the engineer's consequent entitlement. The adjudicator commented that no further consideration needed to be given to the target cost as the net fee claimed was less than the applicable target cost. The contractor submitted that (i) The instant case fell into the category of those cases where the adjudicator decided on an alternative approach to that pleaded and argued by the parties and (ii) The adjudicator should have realised that he needed to give notice of and obtain submissions about that alternative approach.

 

Edwards-Stuart J held that the adjudicator's failure to allow it to comment on his methodology and the figures he proposed to use in arriving at his valuation of the target cost did not amount to a breach of the rules of natural justice. Whilst the contractor was undoubtedly confronted with a deluge of material at a late stage in the adjudication, it told the adjudicator that it would need 14 days within which to respond and was given that time and did not at any time complain to the adjudicator that it had not been able to deal with it. The adjudicator did not need to give notice of and obtain submissions about the approach he adopted because (i) It was open to him to construe the parties’ agreement as he thought appropriate in the light of the submissions made to him and (ii) The figures he was taking for the engineer’s actual costs of carrying out the original scope of work and the variations for which agreed uplifts to the target cost had been made had been put before him by the engineer and could reasonably have been found and commented upon by the contractor.
 

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