If it's not the norm, let the other guy know.
One warm winter, I was the commercial manager for a Mediterranean shipyard, converting a 400,000-ton oil tanker into a floating storage unit. It left me with a high regard for the records and intricacies of ship's engineering, together with a liking for the Provencal lifestyle.
Amec Process Energy and Stork Engineering were in the similar position of converting a ship's hull into a floating storage platform. Although Amec had incurred extra costs for lost hours and variations, Stork had neither agreed the variations nor paid for them, so Amec had to finance the shortfall. Amec is part of a large group and used inter-company financing on which it had to pay interest, compounded monthly, so it claimed for the full financing charges.
However, the court held that as quarterly compounding of interest was the norm, Amec could only claim for this and not for monthly increases. "If," said the judge, "Amec had brought the monthly compounding to Stork's attention at the date of the contract, then the situation would have been different."
The extra costs of legal DIY
Being awarded costs doesn't always cover all your expenses.
If you want to go to court, you can either represent yourself (daunting, tiring but cheap) or hire lawyers (reassuring but expensive). Still, either way, when you win, you get your costs back, don't you? Well, not always.
United Building & Plumbing had been working for Malkit Kajla and was trying to extract the remaining part of the contract sum and a payment for extras. Although Kajla admitted liability for the extras and offered £10,000 to settle the claim, he still wouldn't pay. United went to court where both parties represented themselves. The judge agreed with United on all but one of the extras and ordered payment, plus costs of £3,000, including a sum for assistance by a non-legally qualified aide.
Unhappy with this, Kajla appealed. The Court of Appeal ruled that although a litigant in person could recover the costs of legal service, non-legally qualified helpers did not count. The costs Kajla had to pay were reduced by that sum.
Sick notesBad jobs are like bad pennies. Keep your records.
A 'hospital job' is industry slang for a simple project but Taylor Woodrow's work for Brompton NHS Trust proved anything but. Due largely to service drawing delays and clashes, the project overran 43 weeks. Following a negotiated settlement, Brompton paid Taylor Woodrow £11.5m in damages but then tried to get the money back from its consultants (see below for the whole squad) on the grounds that if it had to pay Taylor Woodrow, then they were at fault.
This threw the consultants into a frenzy of finger-pointing, blaming Brompton, Taylor Woodrow and each other. They argued that Brompton's evidence about the service drawings was faulty and claimed that as Brompton had settled with Taylor Woodrow, it had not actually proved its case, so they could not be responsible for the sums paid out. The courts threw these arguments out.
One of the consultants, Watkins Gray International UK, then said that as Taylor Woodrow was liable for the same damage for delays, it had to make a contribution. The case went all the way to the Lords, which concluded that the arguments Brompton had were different between the contractor and the architect, and dismissed the case.
Own up or pay up
Hide it and you could lose it.
Even though the contract specifies "widgets" you know you'll save a bomb by using "wodgets". You know they aren't as good but if you keep quiet, no-one will ever know, will they?
Several years on, your building is failing and the wodgets are found to be the cause. Worse still, widgets would have been OK. Are you still liable?
Civil liability is limited by a period of time depending on type of contract, and whether tort or personal injury is involved. However, time doesn't start to run if there has been deliberate concealment of a breach of duty.
"Ah," you say, "but I didn't deliberately conceal the wodgets. It was the client's inspectors who missed them. Anyway, it was years ago and time has run out so I can't be held responsible."
This was pretty much the scenario in Cave v Robinson, where a solicitor had fouled up a contract for a land sale and kept quiet about it.
It took the House of Lords to decide that limitation doesn't apply if a defendant has actively or passively allowed their breach of duty to be concealed after becoming aware of it. In a final twist, if a defendant is not aware of their error, there is nothing for them to disclose.
Source
Construction Manager
Postscript
Ann Wright is a quantity surveyor who has specialised in the commercial management of construction for over 20 years. She can be contacted on 0121 250 3510 or emailed at info@wreghitt.co.uk
Float your Boat: Amec Process and Energy Ltd v Stork Engineers & Contractors BV (No 4), March 2002.
Extra Costs of Legal DIY: United Building & Plumbing Contractors v Malkit Singh Kajla, Court of Appeal April 2002.
Sick Notes: Royal Brompton Hospital National Health Trust v Hammond, Lerche, Harris, Massey, Hepden, Reinhold, Teale, Watkins Gray International (UK), Austen Associates and North Neighbour and Nicholson, Clarke, Nichols & Marcel, Arlington Project Management Ltd, Berresford, Pegden Smith and Austen Associates Ltd, April 2002.
Own Up or Pay Up: Cave v Robinson, Jarvis & Rolfe, House of Lords 2002.
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