| Date | 30 June 2004 |
|
|
| Judgment | John Doyle Construction Limited v Laing Management (Scotland) Limited, Inner House Court of Session, 11 June 2004 |
|
|
| The Issue | The manner in which global claims for loss and expense may be presented. |
|
|
| Implication |
A global claim will succeed where the events for which the employer is responsible are shown to be dominant. Otherwise, an apportionment of loss between concurrent causes will generally be appropriate. |
printIn May 2002, I reported the case of John Doyle Construction v Laing Management (Scotland), which considered the manner in which global claims for loss and expense may be pursued. That decision has now been reviewed by the Inner House of the Court of Session in Scotland and in the process, some further helpful guidance has been given on the subjects of global claims and concurrent causes of delay and loss and expense. Laing were management contractors for the construction of a new corporate headquarters building for Scottish Widows. Doyle were works contractors for the superstructure of the building. The works were completed late and Doyle claimed an extension of time of 22 weeks and loss and expense based upon a mixture of time related preliminary costs, overheads, finance charges and reduced labour productivity costs. In setting out its case, Doyle had prepared schedules and narratives describing the causes of delay and disruption to its works. The pleading 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 claim was therefore a so-called global claim. In his decision at first instance in April 2002, Lord MacFadyen confirmed that the logic of a global claim demanded that all the events which contribute to causing the global loss must be events for which the defendant is liable. He concluded that a global claim as such must 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. Advancing claims for loss and expense in a global form was therefore to be considered a risky enterprise. Crucially however, he went on to say that it did not follow that where a global claim had failed, no claim would succeed. There might be, within the evidence, a sufficient basis to find causal connections between individual losses and individual events. Alternatively, it might be possible to make a rational apportionment of part of the global loss to the causative events for which the defendant had been held responsible. Since those questions could not be answered until the trial of the issues between the parties, Lord MacFadyen refused to strike out the claim simply on the basis that it was pleaded as a global loss. He allowed the matter to proceed to trial. In the Inner House, Lord Drummond Young agreed with that conclusion and added further clarification. The starting point was that if a global claim was to succeed, the contractor must eliminate from the causes of his loss and expense, all matters that are not the responsibility of the employer. That position was however mitigated by three key considerations. Firstly, as noted by Lord MacFadyen, it may be possible to identify a causal link between particular events for which the employer is responsible and individual items of loss. In this way, in effect, parts of the claim are extracted from the global calculation of loss and separately allocated to individual events. Secondly, Lord Drummond Young considered that if an event or events for which the employer is responsible could be described as the dominant cause of an item of loss, that would be sufficient to establish liability, notwithstanding the existence of other causes that are to some degree at least concurrent. Of course, establishing the dominant cause of a loss is never an easy matter, but Lord Drummond Young's observations will nevertheless add weight to this school of thought. Where events for which the employer is responsible can be shown to be dominant, other concurrent events which are not the responsibility of the employer can safely be ignored in assessing the loss or damage payable to the contractor. Thirdly, Lord Drummond Young noted that even if it cannot be said that events for which the employer is responsible are the dominant cause of the loss, it may be possible to apportion the loss between the causes for which the employer is responsible and other causes. Lord Drummond Young recognised that such an apportionment would be more readily obtained where the loss was being calculated by reference to delay in the works. Either the loss would be apportioned on the basis of the time during which each of the causes was operative, or responsibility could be divided on an equal basis. Much will however be made of Lord Drummond Young's comment that in carrying out such an apportionment, where a concurrent cause of delay is the contractor's responsibility it may be appropriate to deny him any recovery for the period of delay during which the contractor is in default. This will make it all the more important for contractors to avoid apportionment where they can by demonstrating that the employer events they rely upon are dominant. Finally, the court recognised that matters become more complex when considering disruption to the contractor's work. Nevertheless, apportionment will frequently also be possible in such cases and although that might result in a somewhat rough and ready result, Lord Drummond Young noted that the procedure did not seem to be fundamentally different in nature from that used in assessing contributory negligence. The alternative to such an approach was a strict view that if a contractor sustains a loss caused partly by events for which the employer is responsible and partly by other events, it cannot recover anything because it cannot demonstrate that the whole of the loss is the responsibility of the employer. Lord Drummond Young plainly thought that that was an unacceptable conclusion. The practical difficulties of carrying out an exercise of apportionment should not prevent the contractor from recovering part of his loss and expense in such cases.
CJ-0426
|
|||
|
© Brewer Consulting |
|||
 |
|||