Is this so new? Construction managers have breached their contracts before, the only difference is that the dispute never got to court – which demonstrates one of CM’s many benefits
The judgment in the Great Eastern case reveals Laing’s woeful performance of its construction management responsibilities. It is a tale that will be depressingly familiar to those clients who have had construction managers on their projects who failed adequately to anticipate the effects of delays on overall completion dates, failed to buy packages on the basis of complete information and failed to take steps to mitigate delays or manage a contra-charge system and so on.
In Laing’s case, this seems to have been compounded by a deliberate attempt to cover up by submitting incorrect information on delays and their causes.
The consequences for a client when such projects go wrong can be very significant as this case reveals. That is why Stanley Honeyman’s Construction Management Forum as early as 1991 concluded that “… the client’s role as leader and decision-maker requires that it is involved in the day-to-day running of the project. The client must therefore have the ability and commitment to carry out these tasks successfully”.
Of course we all knew before this case that construction managers had potential liabilities if they breached their contract and of course many construction managers have paid out substantial sums: the fact that these claims have settled is perhaps testament to the fact that disputes under CM contracts on projects with informed clients tend to settle. And any decision based on a non-standard form of contract and a specific set of facts has no general application.
The client in this case was particularly helped by the facts and, specifically, in relation to the causes of delay. Laing’s “broad-brush case” was than none of the delays was caused by their failure but were the result of concurrent causes, such as default by the design team, default by the trade contractors and so on. In fact, the judge found that all the critical delay was the responsibility of Laing except for a couple of isolated events. This of course made recovery of delay costs significantly easier.
Perhaps the only pleasant reading in the judgment is the compliments showered on Ian Wylie from Mace – the client’s construction management expert. It is a much-deserved testament to a phenomenal career delivering many huge and successful construction management projects.
Ann Minogue is a partner in Linklaters
Fearless construction managers?
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