Years of costs litigation served no useful purpose

A High Court judge has criticised the amount of costs racked up in a dispute over the construction of Wembley stadium in litigation that “served no useful purpose”.

The four-year breach of contract dispute between Australian construction firm Multiplex and its subcontractor Cleveland Bridge over the construction of the stadium resulted in £22m in legal costs. While Multiplex claimed £25m in damages, Mr Justice Jackson ordered Cleveland to pay only £6.1m, saying that “each party had thrown away golden opportunities to settle this litigation upon favourable terms.”

Jackson J was highly critical of both parties, saying that each had “brushed aside repeated judicial observations on the wisdom of settling this particular litigation.”

The judge continued: “The normal and sensible way of resolving such matters is for the court to decide questions of principle and for the parties then to sort out the financial consequences. This approach generally leads to the resolution of multi-million pound disputes at proportionate cost, and enables the parties to get back to their real business.”

Matthew Smith of Kings Chambers says the judgment was highly critical of the willingness of the parties to fail to reach “hard headed and commercial compromise once the technology and construction court had adjudicated on issues of principle”.

“The court had invited efforts to compromise issues of quantum,” he says. “Instead, the sums claimed after the adjudication on issues of principle grew. Millions of pounds were spent on the litigation, including approaching £1m on photocopying alone! In the court’s opinion, a resolution broadly along the lines of the judgment could have been arrived at by the parties at fractional cost, if both parties had instructed their advisers to go through the accounts together in a constructive spirit, taking as their starting point the court’s decision on issues of principle.”

Smith adds that the judgment is a further reminder to lawyers to rein in where possible the hunger of their clients for litigation. “If the lawyers do not rein in clients, the courts will, by exercising their discretion on costs accordingly,” he says.