| Date | 29 September 2004 |
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| Judgment | Skanska Construction UK Limited v Egger (Barony) Limited, TCC 30 July 2004 |
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| The Issue | The use of expert delay analysis in complex construction disputes. |
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| Implication |
Despite the use of sophisticated computer based planning techniques, delay analysis remains largely a fact based process upon which the expert must show an objective and balanced approach. |
printThe resolution of disputes on large construction and engineering contracts increasingly involves the use of computer based delay analysis techniques to assist in the identification of the cause of critical delay to a project and, in the more sophisticated cases, to assist in the computation of claims for lost productivity. Whilst the industry is becoming more and more familiar with the use of the tools and techniques employed in the process of delay analysis, unfortunately at present there is very little common agreement upon their correct application. As the courts become more familiar with delay analysis techniques, it is likely that there will be an increasing number of reported cases addressing these issues giving guidance to delay analysts as to the preferred approaches to take and censuring experts who fail to present cogent and balanced evidence that assists the court. An example is the recent case of Skanska Construction v Egger (Barony) where Judge Wilcox was required to take account of the evidence of expert delay analysts in arriving at the quantum of damages. The contract between Skanska and Egger has created a long running legal battle between the parties. Egger is a subsidiary of an Austrian family owned company which produces chip board and other timber based products at several factories throughout Europe. It entered into a contract with Skanska for the design and construction of a factory to be built in East Ayrshire in Scotland. Skanska agreed to undertake design development, management and construction of the factory for a guaranteed maximum price of £12 million. Egger took direct responsibility for the supply and installation of the specialist plant and equipment. The contract was particularly difficult. By completion, Skanska was making claims in the order of a further £12 million relating to what it argued were extras to the contract. There was a counterclaim by Egger for more than £4 million. In January 2003 I reported a decision of the Court of Appeal where the court had reviewed earlier decisions concerning responsibility for claimed additional works arising out of design and development. Following those earlier judgments concerning liability, Judge Wilcox held a separate trial to hear evidence concerning quantum, including the evidence of two expert delay analysts concerning the delay suffered by certain of Skanska's subcontractors leading to loss and expense claims which Skanska sought to pass on to Egger. Judge Wilcox clearly preferred the evidence of Skanska's expert who had prepared an analysis which he described as "accessible". He described the characteristics of a good planning expert as someone who was objective, meticulous as to detail and, importantly, not hide-bound by theory when demonstrable fact collided with computer program logic. Apparently this could not be said of the evidence provided by Egger's programming expert. Judge Wilcox was severely critical of his evidence on a number of levels. Firstly he made clear his frustration with the complexity of his report. It ran to several hundreds of pages supported by 240 charts. Egger's expert had been supported by a team of assistants and it appears that the report he had prepared was too complex and extensive for the court to easily assimilate. More critically however, Judge Wilcox commented that the report had largely been based upon factual matters provided third hand from employees of Egger, such that, perhaps understandably, the expert was not entirely familiar with all the details. Judge Wilcox commented that the extent of reliance upon the untested judgment of others in selecting and characterising the data for input into the computer program, however impeccable the logic of that program, adversely affected the authority of the opinion based upon such an exercise. Judge Wilcox gave an example of evidence which had been made available to Egger's expert which contradicted the evidence he had based his report upon. Despite this, the expert had refused to change his view which clearly irritated Judge Wilcox who commented that it was surprising that there was not sufficient intellectual rigour to admit the possibility of doubt. Other failings in Egger's expert's evidence were highlighted. Judge Wilcox observed that the reliability of a sophisticated delay impact analysis is only as good as the data put in. The expert had made errors in reconstructing the initial contract programme in a computer based network form. Those errors meant that the programme adopted by the expert could not be used as a reliable base line. Similar criticisms were made of the expert's approach to the construction programme, which he had based upon a master programme prepared by Skanska, despite that this had become virtually redundant from the outset. Judge Wilcox commented that at the heart of the matter lay the expert's power of selection of facts and interpretive judgement of them. This being the case, it was crucial that the expert could demonstrate that he applied an objective and balanced approach to the evidence. That balanced approach needed to be applied for example when dealing with the vexed problems of concurrent delays. Egger's expert had taken the view that where there was a delay event that Skanska did not claim to be the responsibility of Egger, he had assumed without further investigation that Skanska was accepting liability for the event. Judge Wilcox described this as applying the logic of Humpty Dumpty and with that searing observation, rejected the evidence of Egger's expert, holding substantially in favour of Skanska.
CJ-0439
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