Construction & Engineering Mediation

More than 30 years’ experience of high level law practice, including my work as a specialist construction Adjudicator, have given me invaluable understanding of the disputes that the sector constantly generates.

As a construction lawyer I have acted on very many projects, large and small, including oil and gas fabrication, power station construction (Zimbabwe, UK, Jordan), subsea cables, hospital design and build, major civil engineering works, power generation (Jersey and Guernsey), energy from waste; airport terminals, hotel developments, shopping malls, housing estates, apartment blocks, procurement challenges, and party walls.

The Special Challenges of Construction Disputes

  • The legal background in the Construction Act generates complex and baffling problems for non-specialists in this area of law
  • There are many different, complex standard forms of contract, from JCT to IChemE, from NEC3/4 to FIDIC, to ICE, PPP, ACA and the NHS’ own special forms.
  • The construction and engineering process has its own special terminology and technology
  • Understanding the inter-locking roles and expectations of developers, employers, lenders, contractors, subcontractors, suppliers and design professionals is vital

My Approach

  • Objective analysis, thorough understanding and commercial realism.
  • I encourage the parties to make best use of the Position Statement process to distil and explain the dispute; in return I work hard to understand the key arguments and the issues;
  • Assist the decision makers to appraise risk and reward - settle now or fight on?

Case Studies

Supreme Court restores the normal rules for Liquidated Damages

Triple Point Technology vs PTT.  BLM (2021) 556, UK Supreme Court

Facts

PTT was a commodity trader and Triple Point was a software designer.  In February 2013 PTT contracted to pay Triple Point $6,900,000 to design and supply a sophisticated software program to support its commodity trading business.  The contract provided for liquidated damages of 0.1% of the value of unusable or undelivered works from the due date to completion.

The parties fell out over payments and performance, then in March 2015 PTT terminated the contract with Triple Point for non-performance.  Triple Point sued for outstanding payments,and PTT counterclaimed for (1) Liquidated Damages (“LD’s”) for delay to the date of termination and (2) general damages  from that date for the extra cost of getting the work completed by others.

Court rulings

The High Court ruled that PTT were right to terminate, and awarded LD’s from contractual completion dates to termination, and general damages for cost to complete thereafter.

The Court of Appeal however ruled that on the wording of the Contract, LD’s were only due on items or stages of work that had been finished as at termination.  Anything incomplete was not covered by the LD’s provision.

The UK Supreme Court over-ruled the CA, saying it was “inconsistent with commercial reality”. PTT was awarded LD’s on all work that was late, up to the date of termination, and damages for the cost to complete thereafter.

Comment

This is a very welcome decision which has restored how we all understood Liquidated Damages clauses to work, i.e. that LD’s apply from the contractual completion date to termination, and general damages for cost-to-complete apply thereafter.

At paragraph 35 of her judgment, Lady Arden in the UKSC robustly dismissed the Court of Appeal’s ruling  as inconsistent with commercial reality and with the accepted function of LD’s.  She noted rightly that parties agree a liquidated damages clause so as to provide a remedy that is predictable and certain for a particular event (here, as often, that event is a delay in completion). The employer does not then have to quantify its loss, which may be difficult and time-consuming for it to do.

She insisted that when interpreting what parties meant by their contracts, they must be taken to know the general law, namely that the accrual of liquidated damages comes to an end on termination of the contract.  After that event, the parties’ contract is at an end and the parties must seek damages for breach of contract under the general law. Consequently, parties do not have to provide specifically in their negotiations for the effect of the termination of their contract. They can take that consequence as read.

Complex civil engineering dispute, where court had ordered an adjournment to mediate. The expert witnesses offered radically different analyses of fault and loss, and there were complex issues of legal liability also.  Making fill use of Zoom's breakouts feature, the dispute was settled over a long day to the satisfaction and relief of both parties.

Technical final account evaluation dispute involving alleged wrongful suspension and repudiation.  Project was for refurbishment of several hundred dwellings. Issues around contract formation, terms of contract, difficulties of interpretation, complex legal argument; successfully resolved.

Seven figure dispute relating to civil engineering materials – alleged non-delivery, dispute over methods of measurement of quantities and non-delivery plus technical issues of quality and non-conformity with specification, extensive materials analysis evidence; counterclaim based on remediation.  Successfully resolved.

Dispute over software copying and copyright ownership between two design houses; very large petrochemical project. Solution involved mutual assistance and a new JV.

Variation claim for £5m plus extension of time; and complex defective works and delay counterclaim between main contractor and developer on a new apartment building, successfully settled.

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