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CoC - Kim

CoC - Kim

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Published by: b165 on Mar 19, 2010
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07/02/2010

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Construction Commercial Insurance & Reinsurance Contract Professional Negligence Personal Injury Health & Safety Product Liability Clinical Negligence
CONSTRUCTION CASE NOTES
KIM FRANKLIN
After completing a law degree at the University of Warwick, Kim was calledto the Bar in 1984. She trained with both Keating and Atkin Chambers andquickly established a name for herself as a construction specialist. She haspractised from Crown Office Chambers since its formation in 2000 andbecome an increasingly prominent figure in major infra structures projectsand other large scale domestic and international disputes.Most recently she has acted in a lengthy ICC arbitration for a Japanesecompany in a dispute arising out of a £30m contract for the construction of achemical processing plant in the UK.
 
Kim regularly writes the ‘Legal Matters’ column in The Architect’s Journal, which is published weekly. Thecolumn seeks to explain a variety of topical construction law issues to the Journal’s non-lawyer readership ofaround 13 thousand.Below are three of her recent articles: ‘Hired Gun’, ‘Ransom Value’ and ‘Taking Adjudication to the Wire’
Employed Expert – Hired Gun? 11.6.07
‘When is an expert not an expert?’ Whilst this may conjure all manner of light hearted responses at theexpense of the expert community, (my favourite being, ‘when X is the unknown quantity and ‘spurt’ is a dripunder pressure’), the correct answer is ‘when they are not independent’. One of the fundamental requirementsof expert evidence, emphasised by the Civil Procedure Rules (CPR), is that the expert owes a primary duty tothe court, irrespective of the interests of their instructing party. The CPR reforms targeted excessive, partisanexpert evidence. Experts were suspected of being prepared to stride into the court room, saloon doorsswinging, dust swirling, Doc Holliday style, as a ‘hired gun’ to fight the party’s cause.
 
 
Construction Commercial Insurance & Reinsurance Contract Professional Negligence Personal Injury Health & Safety Product Liability Clinical Negligence
Various proposals were canvassed to chase these mis-placed mercenaries out of town. The ultimate solution,the single joint expert (SJE), a latter day Lone Ranger, did not solve the problem entirely. The courts werereluctant to saddle the unsuccessful party with an adverse finding without the opportunity of testing it in court.The net result was that the parties would need their own experts in order to challenge the SJE’s findings. Farfrom reducing the amount of expert evidence, the SJE potentially increased the number of experts involved.For this reason, whilst they are used to deal with straightforward money issues, the SJE is seldom involved forcontentious liability issues.The limitations of the SJE have caused the parties to fall back on their own experts. With the CPR ringing intheir ears, party appointed experts are required to declare their independence and acknowledge theiroverriding duty to the court. This put the tobacco company Gallaher in difficulty when they wanted to rely onthe evidence of Mr Goel. He was one of only a handful of senior executives in the international cigaretteindustry with experience of building business in developing markets and preventing smuggling. The problemwas that he worked for them.In Gallaher International v Tlais Enterprises (Judgment 8.3.07) cigarette distributors, Tlais, objected to Goel’sevidence because he was employed by Gallaher. He was not, they said, ‘a suitable person’ to be anindependent expert in their dispute with Gallaher over a distribution agreement for particular brands ofcigarettes in the Middle East.The court concluded that whilst it is always desirable for an expert to have no actual or apparent interest in theoutcome of the proceedings, the existence of such an interest did not automatically make their evidenceinadmissible. It was a question of fact and degree. The court held that Goel should be permitted to giveevidence, particularly as Gallaher had declared his employment and put him on secondment for the duration ofhis expert involvement. As Goel’s expertise was so scarce it would be unfair to require Gallaher to find areplacement. Ultimately Goel would be subject to cross examined as to his independence. Hired gun or not,he would not be spared the shoot out at the OK Corral.
Ransom Value 4.6.07
In response to my eight year old’s request for a more sophisticated joke, I asked, ‘why do the goblins have bigears?’ The answer, ‘because Noddy wouldn’t pay the ransom’ provoked an unexpectedly challenging debateabout the meaning of the word ‘ransom’. Whilst it seems that my children had an innate understanding of theconcept of ‘blackmail’ long before they knew the word for it, they struggled with the notion of holding someoneto ransom. The follow up questions including ‘How much did the goblins want?’ and ‘Why wouldn’t Noddypay?’ prompted ideas for a story considerably beyond the scope of traditional Enid Blyton fare.The concept of ransom also troubled the courts in a case concerning the development of a derelict site withinLondon’s Paddington Conservation Area. The development involved buildings of up to 22 storeys including asupermarket and 300 residential units. On the corner of the site, but outside of it, was No.283 Edgware Roadowned by MR Dean & Sons. Dean believed that No.283 was effectively a ‘ransom strip’. This belief wassupported by Sainsbury’s and the developers who were vying with each other to pay £5.6m, or twice themarket value, for the property. Dean had every justification for believing that if the developers wanted toproceed they would have to pay them a king’s ransom.Dean were not surprised therefore when, following an enquiry, the planning inspector found that retainingNo.283 would diminish the proposed development by its incongruity, by screening the supermarket and
 
 
Construction Commercial Insurance & Reinsurance Contract Professional Negligence Personal Injury Health & Safety Product Liability Clinical Negligence
leaving the shops removed from the face of the development. Dean were far from pleased, however, when onappeal, the Secretary of State found that it would, nevertheless be possible to tolerate No.283 remaining,particularly if it was likely to be acquired and demolished in the foreseeable future. The Secretary of Stateagreed that the potential ransom value disappeared with the grant of planning permission, but went on to grantpermission all the same.In MR Dean & Sons v First Secretary of State (Judgment 11.1.2007) Dean challenged this decision. Theyargued that ransom value does not only arise where land is required for access, but also to make adevelopment more acceptable in planning terms. They were therefore entitled to expect the ransom to bepaid. The Secretary of State had deliberately acted to make the ransom disappear and improve the likelihoodof acquiring No.283. This, they argued, was improper purpose and a breach of their human rights. Whilst the judge accepted that ransom value was relevant for valuation purposes, he refused to accept that planningdecisions must maximise or preserve ransom value. Financial considerations could be relevant to planningdecisions only if they related to the character and use of the land. Any loss of value did not affect Dean’speaceful enjoyment of No.283. The decision to tolerate No.283 was therefore a planning judgment with whichthe court could not interfere.So one answer to the question, ‘why wouldn’t Noddy pay the ransom?’ could be, ‘because Big Ears wasn’tworth it after all’.
Taking Adjudication to the Wire 17.5.07
Love it or loathe it, adjudication is nothing if not a seat-of-the-pants experience. The combination of thetruncated time frame, the procedural free for all and the compulsive tendency to put as much material aspossible before the adjudicator, favours the ‘have a go’ claimant. A claimant who believes, rightly or wrongly,that they have lost out, can bamboozle the defendant and adjudicator alike with a dazzling array of documents,statements, schedules and whizzy charts all leading inextricably to a big, juicy bottom line. There is barelytime to assimilate all this and no time at all to test it. Calls for clarification can descend into unseemlysquabbles about whether the witnesses are simply to be questioned or, heaven forbid, cross examined. Anunsuccessful claimant looses nothing more than their own costs of the exercise. If they are successful, and,more often than not they are, because it takes a brave adjudicator to find that the claimant’s vast smoky edificehas been generated without even a glimmer of a fire, they have an adjudicator’s decision in their favour. Thedefendants may not like the decision; they may not agree with it; they may not want to pay up, but these daysan adjudicator’s decision is as good as cash in the bank and you ignore it at your peril.This point was reinforced again by the Technology & Construction Court in Gray & Sons Builders (Bedford) Ltdv Essential Box Company Ltd (Judgment 11.10.06). RIBA adjudicator, Ian Salisbury, decided that thedefendants had wrongly repudiated their contract with the claimant builders who were entitled to compensationof £115,500. The defendants did not pay. Instead they took what the judge described as ‘a variety oftechnical points’ and gave the appearance that they resisted the enforcement proceedings. At the eleventhhour, on the day before the hearing, the defendants conceded that they did not oppose enforcement butobjected to paying the claimant’s legal costs.The judge reiterated that the proper course for an unsuccessful party was to pay the amount ordered by theadjudicator and argue about it in legal or arbitration proceedings later. He pointed out that it wasunreasonable for the defendants, who ought to have known that they had no defence, to give the impressionthat the enforcement was resisted. Defendants who avoid paying up in accordance with an adjudicator’s

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