3. It was more instructive to look at the issues than the sums involved and the final account issues were relatively straightforward and simple in the context of the dispute and that was the case whether looking at variations, the issue of time (it was the fourth and final extension of time of 21 weeks that was the likely battleground), consequential loss and expense or snagging items. There was a debate about whether the arbitrator would adopt a sampling exercise as had the adjudicator. The court felt that in accord with the duty to provide a cost effective flexible solution the chances of the arbitrator ‘grinding through’ every item were vanishingly small. Turning to the quantum of costs, the Trustees said it would be between £800,000 and £1,000,000. There was however no proper breakdown or particularisation. No use of hours likely to be expended or of applicable hourly rates. The court would have expected at least the level of detail that might be found in a prospective costs budget. The figure of £800,000 or anything close to it was completely unsustainable on the evidence put forward. 4. 5. The claimant came up with a figure of about £333,000 to which they applied a conventional 40 per cent discount to get to the type of figure that might be recoverable by a successful defendant. The court did not need to place any great reliance on that but it was sufficient to show the £200,000 figure offered through the ATE policy was within the likely ballpark. 6. Was it right to look at a discounted costs figure? The court felt it was. No party was entitled to security for costs amounting to a complete indemnity.
The protection was only in respect of such costs order as might be made.
7. The Trustees raised the question whether it was appropriate to take into account any incremental increase in the level of security that might become necessary as referred to in Meadowside. The court accepted there was the possibility of a party coming back for further security (as happens in the context of security for costs for litigation). Whilst not entirely straight forward in the context of proceedings before an arbitral tribunal, where the security is required as a condition upon which an adjudication award is to be enforced, there was no difficulty with the application being made back to the court to vary those conditions should it become appropriate. Such variation could easily include an application for an increase in the security amount. “It seems to me that where a court has made an order subject to these type of conditions, the ring-fencing and the security, it is always open to either party to come back should circumstances require it or justify it and ask for those conditions to be varied and certainly in the order that I am proposing to make it should be made express that there is permission to apply for a variation of the conditions.” The next point was whether or not the ring-fencing of the adjudication sum offered should extend to the appeal process. The Trustees were right to say there was some lack of clarity as to this. The court would propose that the undertaking as to ring- fencing should be extended to cover the conclusion of the appeal process as well, though of course it would be a matter for the claimant as to whether they wished to provide such an undertaking. 8.
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