Case notes

Amec was working for Stork Engineers & Contractors BV on the fit out of a floating production storage and offload vessel (FPSO). Stork was responsible for the 'topsides' – pipework and process plant.

Amec's task was to prepare the fabrication drawings from Stork's isometrics. Amec was then to fabricate the pipework and plant, assemble and commission it. The 10-week fit-out programme was very tight.

Stork provided drawings and materials so late that Amec had to change its working sequence, spending 180,000 man hours more than it had planned. Amec claimed for £7m.

Stork argued this was a global claim and invalid (a complex global claim can fail if each delay and dispution is not accounted for). Stork would not give a variation.

The judge disagreed. Amec's figures were displayed week by week, he said. Amec had many reasons supporting its claim, which was, in effect, a variation.

Stork lost. It failed to follow the contract.
Moral: If possible, claim a variation

All bets are off
Beware the 'economic duress' bite-back

Mr Shortall was hedge betting with Cantor Index. He bought 300,000 shares of Biochemicals plc at around 140p per share. Every penny the share price rose, Shortall stood to gain £3,000. He paid 10% of the purchase price as a deposit, borrowing the remainder against the rise he was expecting in share price.

If the price dropped significantly he had to pay further deposits, within four working days, to cover the loss.

But the shares plummeted to 15p each. Cantor was facing losses of £200,000 and repeatedly chased Shortall, insisting he pay a large sum that day or face closure.

Shortall could not oblige so quickly. He tried to negotiate a half-closure and pay a lesser sum. Cantor would not budge. When the shares were at 16.41p, Shortall reluctantly agreed to closure, which meant that he would pay for the large loss.

Ten days later, when Biometric announced its results, the shares briefly rallied to 130p. Shortall was incensed. If he had been able to sell them, he would have recovered much of his loss.

When Cantor sued for its cash, Shortall refused, alleging economic duress and intimidation. The court agreed. The pressure was illegitimate, Shortall had no practical choice. His damages? £71,521.
Moral: Don't push too hard

The case collapsed, too...
Supplier couldn't wriggle out of it

In May 2000, crane hire company Hewden Tower Cranes Stuart was erecting its TC3 tower crane at Canary Wharf. A six-man team of Hewden's specialist erectors were 'climbing' the tower crane, which means increasing its height by inserting sections using a climbing frame. It was windy and the TC3 collapsed, causing £8m damage.

Normally the contractor and not the plant hirer is responsible for plant safety. This applies even if the plant hire company employs the driver and/or operator.

Hewden argued that under the Construction Plant Hire Association (CPA) conditions, the contractor Yarm was liable. Yarm disagreed and went to court.

Yarm argued that the climbing process was not like day-to-day operation. During climbing, the tower cranes were not in use and Hewden's driver would only take instructions from Hewden's erector supervisor. Only when he had signed off the work could Yarm recommence construction.

The court agreed with Yarm, saying that the climbing process was similar to erection. Hewden was responsible.
Moral: Contractor is not always liable

When the buck won't pass
Tree subsidence stories root out negligent party

In 1990 cracks appeared in the houses at 208 and 210 London Road, Portsmouth. Consulting engineers PEP reported that the cracks were due to subsidence caused by the roots of a row of plane trees.

On PEP's recommendation, the properties were underpinned and the cracks repaired in 1992. The property owners' insurers paid.

The responsibility for pruning the trees was Hampshire County Council's (HCC). Since 1975 Portsmouth City Council had acted as HCC's agent. The insurers tried to recover costs from Portsmouth City Council under the tort of negligence.

Portsmouth said that the insurers should be suing HCC, since it had not been told about the underpinning or given a chance to put the nuisance right.

But the court held that underpinning was necessary and Portsmouth was liable.
Moral: Know where the buck stops