The case concerns a luxury development in London where relations between Employer and Contractor and between the Employer and his professional team became very strained.  There were substantial delays and the Contractor eventually instituted proceedings claiming an extension of time to the Completion Date achieved and substantial sums for loss and expense.  The project was entered into on a JCT Standard form of Building Contract 1998 Edition Private Without Quantities with a Contractor's Designed Portion supplement.  Design work was far from complete by the date the Contract was let.  Many of the individual work packages were only briefly described and were subject to provisional sums.  The Court eventually found that most of the key areas where delay had occurred related to elements of the works for which the Contractor had no design responsibility and it determined that an extension of time should be awarded to the date of practical completion.  It also awarded a substantial sum (£2.3m) for loss and expense.

Main Issues

  1. Concurrent delay

The relevant extension of time clause contained in this standard form required the Architect to grant an extension of time which was "fair and reasonable having regard to any of the Relevant Events", that is to say events which were the responsibility of the Employer.  Where the delay was caused by more than one event, at least one of which was the responsibility of the Employer, the Court decided that the following applied  

  • Contractors must prove their claims as a matter of fact and on the balance of probabilities.  They must show the occurrence of a Relevant Event and that it caused delay leading to loss and expense.  In principle, a Contractor does not need to show, when putting forward a global claim, that it is impossible to plead and prove cause and effect in the normal way.  If there are contractual restrictions on global claims, then they may have an impact.  Otherwise, the Contractor must prove his case on the balance of probabilities.
  • Whilst there is nothing in principle "wrong" with a global claim, it may raise evidential difficulties since the Contractor will have to show that the loss he has incurred would not have been incurred in any event.  He will need to demonstrate that his tender was sufficiently well priced that he would have made some net return and that no other matters are likely to have caused the loss.  A global claim does not transfer the burden of proof to the party defending it and he may adduce evidence that the accepted tender was so low that the loss would always have occurred, irrespective of the events relied on by the Contractor.
  • Even if an event which is not the fault of the Employer caused or contributed to the global loss, that does not mean that the Contractor will recover nothing.  It depends on the impact of such an event.  It may be that the claim will not be rejected but a deduction will be made for the individual event which is not the Employer's responsibility.
  • If it is practicable to attribute actual costs to individual events, the Court may be sceptical about a global claim.  However, a global award may be made even if the Contractor himself created the impossibility of disentanglement as to the various causes.  The measure of the claim's success will depend on the facts and will be subject to proof.

However, the Court did not comment on the position where the parties have drafted their extension of time clause with the aim of reaching a different outcome and it seems it still remains open to the parties to do so.  

  1. Global claims

The Court gave general guidance on the approach to be taken in relation to "global" claims, defining these as, broadly speaking, claims where causes of delay are identified and the total of the Contractor's cost is computed.  From this figure the Employer's net payment is deducted and a claim for the balance is made, without attributing actual costs to individual events.

The Court identified the following propositions  

  • Contractors must prove their claims as a matter of fact and on the balance of probabilities.  They must show the occurrence of a Relevant Event and that it caused delay leading to loss and expense.  In principle, a Contractor does not need to show, when putting forward a global claim, that it is impossible to plead and prove cause and effect in the normal way.  If there are contractual restrictions on global claims, then they may have an impact.  Otherwise, the Contractor must prove his case on the balance of probabilities.
  • Whilst there is nothing in principle "wrong" with a global claim, it may raise evidential difficulties since the Contractor will have to show that the loss he has incurred would not have been incurred in any event.  He will need to demonstrate that his tender was sufficiently well priced that he would have made some net return and that no other matters are likely to have caused the loss.  A global claim does not transfer the burden of proof to the party defending it and he may adduce evidence that the accepted tender was so low that the loss would always have occurred, irrespective of the events relied on by the Contractor.
  • Even if an event which is not the fault of the Employer caused or contributed to the global loss, that does not mean that the Contractor will recover nothing.  It depends on the impact of such an event.  It may be that the claim will not be rejected but a deduction will be made for the individual event which is not the Employer's responsibility.
  • If it is practicable to attribute actual costs to individual events, the Court may be sceptical about a global claim.  However, a global award may be made even if the Contractor himself created the impossibility of disentanglement as to the various causes.  The measure of the claim's success will depend on the facts and will be subject to proof.
  1. Notification of claims

The relevant clause of the Contract required the Contractor to submit to the Architect such details as should reasonably enable him to ascertain the extent of loss and expense.  The Court considered what information must be provided pursuant to this clause.  

  • The extent of information already available to the Architect (for example through Site meetings) must be taken into account in considering the Contractor's obligations for provision of information
  • The obligation is to submit details which are "reasonably necessary" for the ascertainment of loss and expense.  This requirement may be met by an offer to the Architect (or Quantity Surveyor) to inspect records at the Contractor's office, as actually occurred in this case.  Whilst it would, be possible for a clause to require that the Contractor should provide details and all necessary supporting documentation, that is not what the clause said in this case.
  • The Architect must be satisfied that the loss and expense claimed is likely to be or has been incurred but he does not have to be "certain"; he only needs to review all the detail that is reasonably called for by the wording of the clause.  

Conclusion

This case provides valuable guidance as to the meaning of the standard form JCT clauses in question and may also be of assistance in interpreting the broadly similar provisions to be found in many other standard forms currently in use. However, it is always open to the parties to make differing provision in their contracts which may lead to a different interpretation being adopted.