It was the torpedo, stupid

I have always been a bit fuzzy about the law relating to “global claims” and the policy considerations that drive it. But the fog has now lifted, thanks to reading the opinion of the Court of Session in John Doyle Construction Limited vs Laing Management (Scotland) Limited, which was given just over a month ago. This dispels the confusion caused by different terminology, reviews the US authorities and even manages to include a reference to a 1918 case about ships torpedoed by a German submarine in Le Havre. And it is only 13 pages long …

For those who cannot find time to read even this brief document, it relates to Laing’s attempt to strike out a claim by Doyle for loss and expense arising out of delay and disruption. The basis for this attempt is that the claim was “insufficiently particularised”. In other words, it did not demonstrate a causal link between the delaying events and the loss and expense incurred. Laing did not succeed.

In fact, said the court, Doyle’s claim was, in US parlance, a “modified total cost claim” – only parts of it were presented on a global basis, and in relation to the remaining parts, Doyle sought to prove causation in a conventional manner. Modified total cost claims are particularly helpful in relation to disruption. While it may be straightforward to separate out the effects of a delay – for example, the foreman is required to be on site for longer – it can be more difficult when a variety of causes result in further supervisory staff having to be engaged.

The court was at pains to emphasise that common sense must be used to identify the causal link between a particular event and individual items of loss. If, for example, the late provision of information and design changes have caused delay, the “dominant” cause should be considered, even if other events played a part.

That is where the U-boat came in. Was the loss of the ships in Le Havre caused when they were torpedoed (not insured) or when they were subsequently moved inside the outer breakwater where they were damaged at each ebb tide (insured). The House of Lords held that the dominant cause was the torpedo …

If there is no dominant cause, loss can be apportioned between others. For example, if late information and bad weather have together caused delay, loss can be apportioned between the two according to their relative significance – probably on an equal basis in the case of concurrent causes – but recovery could still be denied to the contractor for any period of delay during which they were in default. Disruption cost are more difficult to ascertain, but here, too, the court urged judges to apportion, even if it produces “a somewhat rough and ready result”. Otherwise the contractor might be deprived of any recovery, and practical difficulties should not be allowed to cause that sort of injustice.

If any part of the total cost claim is not the employer's responsibility then the logic of the global claim is undermined

A global claim, on the other hand, will only be permitted if all of the events that caused the loss and/or expense are the responsibility of the employer – the logic being that if the employer is responsible, it doesn’t matter how much is attributable to each event. If any part of the total cost claim is not the employer’s responsibility, then the logic of the global claim is undermined. In these circumstances, the contractor will have to fall back on proving causal connections where they can, or making a rational apportionment as outlined above – but not a global claim.

Doyle pleaded two causes of delay – the late issue of information and design changes – but it made the mistake of attaching to its pleadings some schedules that attributed some delay to heavy snowfall. The court discounted them, but commented that it would have been better if they had never been included – a salutary warning to those who believe that the validity of claims should be assessed by reference to their weight rather than content.

So, only a procedural skirmish for the parties, but an incredibly useful crib book for the claims industry …

Ann Minogue is a partner in Linklaters