Confidential contractor client

Manchester City Centre scheme

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Brief description

The sub-contract was for groundworks on a city centre tower block. The sub-contractor client had completed works on site, but they had incurred an additional £500,000 in costs and the sub-contract had been prolonged by 6 months.

The client wasn’t aware that they were owed any additional costs as the actual progress of the works had been delivered out of sequence due to complex and multiple issues on site, with the contractor making counter allegations as to the cause of any head of loss. The contractor also argued that in any event, the subcontractor was now time barred from making claim for loss and expense under the amended clauses.

Vextrix analysed the sub-contact and all of the available site related records. The client’s staff were also interviewed to ascertain the chain of events.

Vextrix then undertook a delay analysis and this indicated that the 6 month prolongation was due to the contractor issuing late design and then suspending the groundworks subcontract works to allow the steel erection to commence, in order to maintain the master programme. This was clearly demonstrated in the delay programmes that Vextrix developed, as well as the supporting narrative that referenced contemporaneous site records in precise detail.

There was evidence of waiver during the administration of the subcontract and so it was argued that the time bar to a claim for loss and expense had been rescinded.

Disruption and prolongation costs were assessed and demonstrated the exact losses incurred.

Value added

The client had a very low expectation of financial recovery of their losses, due to doubt of their entitlement under the subcontract and whether the contractor caused the delay or not. In fact, the contractor was extremely dismissive, arguing that they owed them money. At the very most, the client hoped for a negotiated settlement of a low percentage of the losses incurred.

In the event and in a relatively short period of time and relative cost, the contactor’s culpability was established, and the majority of the losses incurred were demonstrated as pertaining to this cause. The client subsequently had the confidence to enter into discussions with the contractor and insist upon recovery of 100% of the losses claimed, as these were backed up with detailed evidence, and if required go to litigation or Alternative Dispute Resolution.

Lessons learnt

Early interviews with key site personnel was key to establishing culpability in a delay claim of this nature.