| Date | 15 May 2002 |
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| Judgment | John Doyle Construction Ltd -v- Laing Management (Scotland) Ltd, OH, Court of Session, 18 April 2002 |
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| The Issue | The manner in which global claims for loss and expense may be acceptable. |
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| Implication |
Global claims will fail where it is shown that a material causative factor is not the responsibility of the defendant. The claimant should wherever possible put forward alternative assessments of the loss to allow apportionment to key events. |
printMost people involved in commercial matters in the construction industry will understand what is meant by the term "global claim". In the 1991 case of Mid Glamorgan County Council -v- J Devonald Williams the court held "where a claim is made for extra costs incurred through delay as a result of various events whose consequences have a complex interaction that renders specific relation between the event and the time or money consequence impossible or impracticable, it is permissible to maintain a global claim". This followed from the 1967 case of Crosby -v- Portland, in which the judge said "I can see no reason why (the arbitrator) should not make individual awards in respect of those parts of individual items of the claim which can be dealt with in isolation and a supplementary award in respect of the remainder of these claims as a composite whole". Despite these rather general statements of support, the industry has remained divided upon whether global claims should be permissible. A more thorough examination of the issue has been made in recent the case of John Doyle Construction -v- Laing Management (Scotland). Laing sought to obtain an order that the global claim submitted by Doyle should be struck out before trial. The court refused to grant the order, but this cannot be seen as further support for the viability of global claims. Lord MacFadyen said, "Advancing a claim for loss and expense in a global form is a risky enterprise". Doyle had put forward as part of its case, schedules and narratives describing the causes of delay and disruption to its works. The pleadings stated "Despite best efforts, it is not possible to identify positive links between each such cause of delay and disruption and the cost consequences thereof." The amount claimed for labour disruption was therefore based upon a comparison between pre-contract estimates and actual costs. Counsel for Laing pointed out to the court that this claim for loss and expense was a global claim. He admitted that there were circumstances in which a global claim might be made on the basis that the aggregate loss had been caused by the interaction of a number of events providing, he argued, that the party against whom the claim was being made was legally responsible for all those events. Thus, according to Laing, the global claim depended upon certain key assumptions, in particular, (1) that Doyle were not themselves responsible to any material extent for the increased costs in respect of which the global claim was advanced, and (2) that Laing were responsible for all of the causal factors that contributed to the increased costs. It undermined the whole global claim if one factor relied upon by Doyle in causation of the global loss could be seen to be the responsibility of Doyle, or otherwise not the responsibility of Laing. In support of these contentions, Laing cited extracts from several text books on construction law, including Emden, Keating and Hudson. A very interesting analysis of a number of cases from the United States was also given to the court. Counsel for Laing went on to argue that in light of the approach adopted in these text books and American authorities, Doyle's global claim was not supported by its own pleadings. One of the factors pleaded by Doyle as causative of the disruption, was a factor for which Laing was clearly not responsible. The necessary foundation for a global claim was therefore absent and the claim must fail as a whole. Counsel for Doyle countered these arguments by saying that even if one cause of delay was not Laing's responsibility, there were many other concurrent delays that were its responsibility. Moreover, he argued, it did not follow that if Doyle was responsible for a causal factor, there could be no rational basis for separating out from the global claim a part for which Laing could properly be held liable. He argued that it would be improper for the court to strike out Doyle's entire global claim simply because one causal element, among many, was held not to be attributable to Laing. The matter should be allowed to proceed to trial. Lord MacFadyen concluded that there was much in the arguments put forward on behalf of Laing that held true. In his view, the logic of a global claim demanded that all the events which contribute to causing the global loss, be events for which the defendant is liable. He concluded that a global claim as such must therefore fail if any material contribution to the causation of the global loss is made by a factor for which the defendant bears no legal liability. The rigour of that analysis was however to be mitigated by treating the matter of causation with common sense. Moreover, although the global claim might fail in the manner described above, there may be in the evidence a sufficient basis to find causal connections between individual losses and individual events. Alternatively, it may be possible to make a rational apportionment of part of the global loss to the causative events for which the defendant has been held responsible. In conclusion the global claim was to be allowed to proceed to trial for two primary reasons. Firstly, the pleadings made it clear that Doyle relied on concurrent causes of delay and disruption. Upon hearing the evidence, this might overcome the contention that, since one causative event was not the responsibility of Laing, the claim should fail. Secondly, there remained the possibility that the evidence to be heard during the trial would afford a satisfactory basis for an award of a sum lesser than the full global claim.
CJ-0219
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