Hurley Palmer Flatt Ltd v Barclays Bank plc

Citation: [2015]  Bus LR 106; [2014] EWHC 3042 (TCC); [2014] All ER (D) 162 (Sep); [2014] BLR 713; (2014) 156 Con LR 213; [2014] CILL 3577; [2014] 2 CLC 538

Nature of case:
The Claimant in these part 8 proceedings (responding party in the subject adjudication proceedings) provided mechanical engineering services. Its client was Barclays plc (the “Client” as defined) pursuant to a formal appointment document. The employer under the relevant building contract was not Barclays plc but Barclays Bank plc (the Defendant, and the referring party in the adjudication), a wholly owned subsidiary and the owner of the site where the M&E work was carried out. The Claimant was said to have performed its services negligently and thereby to have caused Barclays Bank plc to suffer substantial losses.

The appointment entitled interested affiliate companies to enforce the terms of the appointment as though they were the “Client”, i.e for the purposes of the Contracts (Rights of Third Parties) Act 1999.  The appointment made express provision for adjudication pursuant to part I of the Scheme. Barclays Bank plc therefore commenced adjudication proceedings seeking damages for professional negligence, contending that it was thereby enforcing the terms of the appointment as “Client”, though not a party to it. It argued that (1) the right to adjudicate was itself a term of the contract that the Defendant was entitled to rely upon as a third party, and in the alternative (2) it was entitled to enforce the terms of the contract via adjudication as it was in court proceedings.

The Claimant brought part 8 proceedings seeking a declaration that the adjudication was invalid on the grounds that the right to enforce the terms of a contract under the 1999 Act does not include the right to bring an adjudication. The declaration was granted and permission to appeal refused.

The question of whether enforcement of the terms of a contract for the purposes of the 1999 Act was restricted to the two meanings expressly identified in sections 1(5) and 1(6), as the Claimant contended, was not decided.

Link to Judgment

Counsel: Justin Mort QC appeared appeared on behalf of Claimant.

Counsel

Justin Mort QC

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