b. Where the entitlement to liquidated and ascertained damages has not been determined either expressly or impliedly by the adjudicator's decision, then the question whether the employer is entitled to set off liquidated and ascertained damages against sums awarded by the adjudicator will depend upon the terms of the contract and the circumstances of the case.” Here the right was said to arise not from the decision the subject of the enforcement but from the earlier decision of an adjudicator in another dispute between the parties. Surprisingly the decision relied on was not produced before the court. Neither did Bedford House provide any evidence that it had given proper notice of its intention to exercise the right to set-off (as required by clause 1.2.29.2 of the parties’ JCT DB Contact 2011). In those circumstances the court rejected Bedford’s submission and enforced the adjudicator’s decision in full. The court awarded Faithdean its costs on the indemnity basis. There was no defence to the application yet Bedford House had caused Faithdean to incur the costs of preparing for a contested hearing in completing the The court awarded Faithdean its costs on the indemnity basis. There was no defence to the application yet Bedford House had caused Faithdean to incur the costs of preparing for a contested hearing in completing the acknowledgement of service disputing the whole claim, yet offering no evidence when it came to it. Its behaviour was unreasonable and warranted indemnity costs.
Set-off of LDs at enforcement stage – Indemnity costs: Faithdean Plc v Bedford House Ltd (No. 1) [2021] EWHC 961 (TCC) and Faithdean plc v Bedford House Ltd (No. 2) [2021] EWHC 962 (TCC) Alexander Nissen QC Judgment not available at the time of this digest. The defendant, Bedford House, sought to exercise a right of set-off against the decision of an adjudicator in favour of the claimant, Faithdean. It is now a universal principle, that the only grounds on which an adjudicator’s decision can be challenged upon enforcement is for material breach of the rules of natural justice or lack of jurisdiction. In this case, Bedford made no such challenge but wished to rely on an exception namely the right to deduct liquidated damages arising as a consequence of the decision of an adjudicator, in this case in the sum of £30,000. In Balfour Beatty v Serco [8], Jackson J as he then was said:
“I derive two principles of law from the authorities, which are relevant for present purposes.
a. Where it follows logically from an adjudicator's decision that the employer is entitled to recover a specific sum by way of liquidated and ascertained damages, then the employer may set off that sum against monies payable to the contractor pursuant to the adjudicator's decision, provided that the employer has given proper notice (insofar as required).
[8] [2004] EWHC 3336 (TCC) December 2004
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