Liverpool Council has won a high court battle with a collapsed contractor over payments for temporary fencing after an argument over a typo.
A hearing at Manchester High Court was told that an adjudicator's decision to order the local authority to pay £128,500 to Vital Infrastructure Asset Management (VIAM) had been reached in a “procedurally unfair manner.” The council had initially refused to pay the fee to VIAM, for maintenance of fencing plus interest, after the firm went into administration last summer.
That left a number of road schemes across the city half finished and the council scrambling to appoint a new contractor. The local authority made an insolvency application seeking permission to bring proceedings against the firm over the judgement.
READ MORE: Woman soaked in petrol from Lucozade bottle caught fire
At Manchester High Court, His Honour Judge Stephen Davies found the conduct of the adjudication to be a “fundamental departure from the obligation to follow a fair procedure” because it had been decided that Liverpool Council had agreed the existence of a typographical error in the contract - when the point was neither argued by VIAM nor conceded by the council, and nor was there any evidence to that effect.
Judge Davies added: “He has not, in his supplemental observations, been able to explain in any way which I regard as convincing on what basis he considered that he was entitled to reach the decision he did without allowing Liverpool Council the opportunity to address him on the point.
“He has not been able to suggest that these departures from natural justice have had no practical adverse effect upon Liverpool Council. Indeed, it is apparent that Liverpool Council has lost the opportunity to have the substantive arguments which it did put forward determined by him and there is no suggestion or obvious basis for my concluding that these arguments were incontrovertibly misconceived.”
Cllr Dan Barrington, cabinet member for climate emergency, transport and environment, said he was pleased that the High Court has ruled in the council’s favour.
He said: “It would have been grossly unfair for Council Tax payers to have had to stump up this money when VIAM had gone into administration, leaving work unfinished across the city. We are determined to get best value for residents and challenge contractors if we believe they are acting unfairly.”
Karen Agbabiaka, interim chief highways officer, added: “It was important that we challenged the adjudicator’s decision because we knew that the decision was fundamentally unfair. This is all part of our new approach to setting up and managing contracts, resetting our relationship with contractors so that we get a fair deal.”
