Deducting liquidated damages is simple compared with having to prove unliquidated damages. However, if that option is conditional on complying with a contract procedure, it is critical to follow that procedure carefully. Under a Joint Contracts Tribunal 2011 Intermediate Contract, completion was delayed and the contract administrator issued a certificate of non-completion.(1) It subsequently issued an extension of time, but no further certificate of non-completion. The employer later issued a payless notice and deducted liquidated damages; however, the contractor objected.
The judge agreed. The contract said that if an extension of time was made after a certificate of non-completion, the certificate was cancelled and the contract administrator "shall, where necessary, issue a further certificate". As it had not done so, that condition for deducting liquidated damages had not been met and they therefore could not be deducted.
Further, the judge ruled that costs incurred by claims consultants assisting a litigant in person will usually be recoverable on adjudication enforcement proceedings, assuming that the same consultants have represented the party in the adjudication.
For further information on this topic please contact Chris Fellowes at Mayer Brown International LLP by telephone (+44 20 3130 3000) or email ([email protected]). The Mayer Brown International LLP website can be accessed at www.mayerbrown.com.