Cases - Galliford Northern Ltd v Markel Capital Ltd

Record details

Name

Galliford Northern Ltd v Markel Capital Ltd

Date

[2003]

Citation

EWHC 1216 (QB)

Legislation

• Third Parties (Rights Against Insurers) Act 1930
• Housing Grants, Construction and Regeneration Act 1996

Keywords

Construction contracts - adjudication - insolvency - voluntary winding up - liquidator - insurance - whether transfer and vesting following adjudication award - summary judgment - enforcement -Third Parties (Rights Against Insurers) Act 1930 - Housing Grants, Construction and Regeneration Act 1996, sections 104 and 107

Summary

Inadequate design by MHA meant that the project in this case suffered a 24-week delay. As a result, Galliford incurred losses of more than £2m. MHA went into voluntary liquidation before Galliford's claim had been processed. Galliford commenced adjudication proceedings regardless. MHA's insurers, Markel Capital Ltd (MCL), instructed solicitors who contested the adjudication.

The adjudicator found in favour of Galliford, but no monies were paid out. Galliford therefore issued proceedings against MCL, on the basis that there was a right of indemnity under the Third Party (Rights Against Insurers) Act 1930. The court said that, although an adjudicator's decision established a contractual right to pay, the obligation was not absolute. The decision would not be enforced if the adjudicator had exceeded his jurisdiction. The court therefore held that liability under an insurance policy was not established until either the adjudicator's decision was enforced by a court or it was agreed.