Judge determines that contractor was legally responsible for delays and cost overruns on refurbishment of London's Great Eatern Hotel.

The technology and construction division of the High Court has awarded damages of £8.9m against John Laing Construction in a claim from London's Great Eastern Hotel.

The refurbishment of the Conran-owned hotel in Liverpool Street, London, started in 1997 and was completed in 2000, a year behind schedule, by John Laing’s former construction arm, which was sold to O’Rourke in 2001.

The hotel issued a claim in 2002, saying that during the works, the site was “in a state of chaos” and asked for £17.5m damages. The judge determined that John Laing Construction was legally responsible for delays and costs overruns on the project.

John Laing chief executive, Andy Friend, said, “This is the last major legacy issue that falls to us as a result of the performance of Laing Construction in the late 1990s. Since the sale of Laing Construction we have worked our way through the retained construction liabilities and we are pleased that this, the last of the significant outstanding construction liabilities, is drawing towards a close.”

John Laing said that the award, plus the likely level of costs and interest, was covered by its existing provisions for retained construction liabilities and would not have a detrimental impact on consensus profit forecasts for 2004 or 2005.

“Subject to a reasonable settlement of costs, interest and insurance issues, there will be no adverse profit and loss impact for the group,” Friend said.