As the mood of the times moves smoothly from neurosis to outright hysteria, the return of the Wembley soap opera is strangely reassuring, in a perverse kind of way.
At least it tells us that even while we await the arrival of financial Armageddon, some things never change. For example, the litigious nature of construction.
The war of attrition between Multiplex and its steel contractor Cleveland Bridge came to yet another head this week when the judge decided that Cleveland Bridge owed Multiplex £6m in damages and £2m in legal costs. The judge said Cleveland Bridge’s behaviour after it walked off site was as deplorable as Multiplex’s had been before. He also chided both sides for failing to settle this four-year dispute four years ago (a failure that turned him into Britain’s highest-paid QS, a job he made it clear he hadn’t applied for).
The legal bill for construction’s biggest cockfight in a decade came to £22m (including £1m for photocopying the 550 ring files that comprised the trial bundle). That meant the result was a Pyrrhic victory for Multiplex, which was claiming £25m but has instead racked up £10m in lawyers’ bills, £8m of which it will have to pay itself. And it’s not over yet. Cleveland Bridge is talking about applying to the Court of Appeal and Multiplex has cases outstanding with Mott MacDonald and PC Harrington. It’s not surprising that Lord Coe called Wembley “a cock-up” at the Tory party conference; that’s putting it politely.
Of course, cases like this are few and far between, thank goodness, even in notoriously risky projects such as stadiums (as you’ll recall, before Wembley, we had Cardiff’s Millennium Stadium). At the moment, they are being stalled by the credit crunch. Mike Ashley’s offer to flog Newcastle United to the Nigerians for a knock-down price of £280m is a sign of the times.
But what of the future? Worryingly, as we report this week, lawyers are noticing an increase in claims as parties become jumpy about getting paid. The Construction Products Association’s latest forecasts, which predict a decline in output of 7% over the next three years, deepen the depression. The Construction Act has never been tested by recession; let’s hope that its machinery for ensuring fair payments and swift dispute settlements can be sustained under the grinding financial pressure that the industry is now facing.
A world of opportunities
Nobody knows yet which countries will be immune from the world banking crisis, but with opportunities dwindling in the UK, the most farsighted firms are doing what they’ve always done: getting on a plane and looking for work. And as construction becomes more global, Building is doing its best to help. This week, the magazine is packed with overseas coverage, including Bahrain’s World Trade Centre and the rise of Benoy as a world power. We have also launched a global edition of our website (www.building.co.uk/global), which has a particular emphasis on projects and firms in the Middle East, and we bring you a 54-page Gulf supplement. So wherever you go – don’t leave home without us!
Denise Chevin, editor