Jurisdiction(s):
United Kingdom

High Court (England and Wales) refuses stay or strike out despite mandatory adjudication clause in multi-party PFI dispute: Lancashire Schools v Lendlease [2024] EWHC 37 (TCC)

Published on: 25 January 2024

Published by a LexisNexis Dispute Resolution expert

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Lancashire Schools SPC Phase 2 Ltd v Lendlease Construction (Europe) Ltd [2024] EWHC 37 (TCC) What are the practical implications of this case?

This ruling illustrates that the court retains a discretion to refuse striking out and staying proceedings, even where a party has failed to abide by compulsory alternative dispute resolution obligation. That conclusion may come as a surprise to practitioners who might anticipate steps to enforce mandatory alternative resolution clauses. The court, however, weighed the practical difficulties that would emerge if the claim brought solely against the fourth defendant were put on hold. Imposing a stay in that context posed a risk of either postponing the progress of the litigation overall, or of the claim against the fourth defendant advancing on a different timetable from the other claims within the proceedings. The obligatory character of the ADR clause, which specified adjudication, did not trump those pragmatic concerns. Practitioners should bear in mind that striking out a claim is a draconian measure, one that will not be made absent a cogent justification. Accordingly, when evaluating an application to stay proceedings in reliance on a mandatory alternative jurisdiction clause, practitioners ought to consider the broader consequences of the...

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