Arbicon ADR - Case studiesADR Cases

Case Study No 1 - New Hotel - Value £2.9m

Dispute 8 weeks disputed - LAD deduction and Award of Extension of Time

Role Supporting role in preparation of claim for main contractor

Result 8 weeks awarded and LADs ordered to be repaid

Representing the Main Contractor, in a supporting role with a firm of solicitors. The appointment included the

preparation of the calculation and submission of a final account and claim. The extension of time claim was

calculated and adjudication proceedings were issued by the Contractor's solicitors against the employer to obtain the

entitlement and recover the deduction of LADs. The contract was phased for a period totalling 46 weeks, a 21 week

overrun was experienced. The architect awarded 13 weeks, 6 of which were without costs and deducted 8 weeks of

LADs. The adjudicator awarded a total of 21 weeks equal to the overrun of which 7 weeks were without costs, thus a

further 8 weeks were obtained and LADs were ordered to be repaid. This amounted therefore to a success for the

client.

Case Study No 2 - New Hotel - Value £2.9m

Dispute Payment of £67,000 plus interest for variations and prolongation costs

Role Defending the main contractor against joinery sub-contractor

Result Award of £23,000

This defence against a specialist joinery sub-contractor involved calculations and pleas that this was a spurious and

over-priced claim. There were extensions of time and loss/expense elements in addition to variations in dispute. The

extensions of time claim might have seemed reasonable, except this sub-contractor was working direct for the

employer on some major items on the same site adding up to much of the extra time claimed. The adjudicator was

persuaded to greatly reduce this claim to a more reasonable level of valuation for the work, thus the claim including

interest was 35% successful. This was seen as a success by the client.

Case Study No 3 - New Retail Store and Offices

Dispute Payment of £146,000 plus interest for variations

Role Defending the Employer against M&E contractor

Result Award of £60,000

In this case the employer self-managed the works using trade contractors, however a dispute with the M&E

contractor arose. There were some 100 complex disputed items, which basically comprised loss and expense,

variations, inadequate design, defective and incomplete works. The Contractor issued adjudication proceedings using

a firm of London-based construction solicitors. The claim was for £146,000 plus interest and VAT and the terms of the

Scheme for Construction Contracts (Regulations) 1998 applied. The proceedings included an adjudicator's site

meeting, witnesses and experts. In his decision the adjudicator generally dismissed most of the contractor's claims

and found in favour of the employer's counterclaims. Due to procedural irregularities the adjudicator ruled he had no

jurisdiction to rule on part of the air conditioning dispute worth £80,000. In other words the Employer had the right to

have this second dispute heard in a second adjudication (which he chose not to embark on). Had the air conditioning

been fully judged a repayment could easily have been due to the employer.

Case Study No 4 - New Housing Development

Dispute Payment of £54,000 including interest for the final account

Role Claiming for the sub-contractor against the main contractor

Result Award of £24,000

Following an unsuccessful attempt to resolve a final account, adjudication proceedings were commenced to obtain

payment of £24,000 from the Main Contractor. A classic case of "subbie bashing", a defective site investigation failed

to appreciate the clear abnormal amounts of groundwork generated by a 1.0 to 1.2m deep depth of topsoil. The main

contract had been agreed under design and build terms and the sub-contract was on remeasurement terms, a classic

path to dispute.

In this case a dispute arose on payment when works were 80 - 90% complete. This resulted in the groundwork

contractor withdrawing from site making the dispute more polarised. As with many groundwork cases the difficulty is

in proving the work with inadequate drawings and records. The difficulty for the adjudicator somehow was in tangibly

identifying the actual quantum, despite detailed measures being agreed on site as the work progressed. In the

adjudication the main contractor submitted a counterclaim and a new measure in a different form to that adopted

previously, thus confusing the issues including reference to the defective soil report as if it were true. The defective

soil report received some preference from the adjudicator, but the counterclaim failed entirely. The 45% success

achieved thus was seen as a success by our client.

Case Study No 5 - Cladding and Roof Sub-Contract - Agricultural Building

Dispute Payment of £25,000 outstanding on the final account

Role Claiming for sub-contractor against the main contractor

Result Award of £14,000

A blatant case of non-payment and typical of why adjudication has been introduced to the construction industry. The

contract had few terms and thus was dominated by the terms of the Scheme for Construction Contracts (Regulations)

1998. Interestingly but not surprisingly, the sub-contractor's solicitors were unaware of adjudication, failed to collect

the debt, thus the account was almost written off.

Work had been completed three years previous to adjudication, during which time the respondents had written two

letters in response to the final account. These letters did not address any of the issues. The respondents incorrectly

believed that if they did not respond there would be no dispute. Subsequently there were jurisdicational claims for "no

dispute" and amusingly "ambush" all of which were rejected. The claim was 56% successful and the client considered

the matter a success.

Case Study No 6 - Student Halls - M&E Sub-Contract

Dispute Payment of £321,000 plus interest on an interim application

Role Defending the main contractor

Result Claim failed entirely, thus client entirely successful

Acting for the main contractor, there were two distinct points of attack and on both counts the claim failed; (1) no

entitlement to further interim payment and; (2) the account itself. In the first instance a jurisdictional challenge was

raised as the adjudication referred to an interim application. The parties had agreed in their contract to an added

clause which expressly provided that the sub-contractor submit a statement of final account and all sums due to him

within three months of practical completion after which time there would be no further right to interim payment. In

other words a time limit in which to submit an interim application. The referred application was submitted four months

after practical completion and thus out of time. The adjudicator did not accept that he did not have jurisdiction to

proceed as there was no accord in the adjudication between the parties on the contract clause in question. The

adjudicator then decided in the later decision that the application was too late and failed entirely on this basis.

On the second instance of account submitted, the heads of claim included variations, dayworks, a four week delay in

the works leading to prolongation and disruption values and a repayment of a commercial discount. In the Response

all of the claims were rebutted mainly on the basis that no evidence had been provided to prove the claims, plus

extremely detailed evidence of major contra-charges were submitted resulting in a repayment position on the

account. The adjudicator accepted that we had withdrawn all previous concessions and that the claimant had to

prove their case from first principles. The claimant did not show how the liability for the four week delay was the

client's fault, despite a two week admission previously, which was withdrawn in the adjudication. Evidence to support

all heads of claim was missing and in view of the contra-charges, the claimant was held not to have discharged the

evidential burden of proof required and the claim failed entirely, due to lack of evidence. It was further provided that

the "disruption" and "prolongation" elements of the works were due to the sub-contractor's mismanagement. On the

issue of commercial discount this had been decided to have failed in a previous adjudication, it therefore failed again

in this one. The client was extremely pleased with this result.

Case Study No 7 - New Offices - M&E Sub-Contract

Dispute Payment of £121,000 for defective and under designed air conditioning

Role Prosecuting the claims of the main contractor

Result Client awarded £98,000 in damages for breach of contract

Following completion of an Air Conditioning system, it was apparent that the client was experiencing difficulties with

the installation. The sub-contractor (SC) failed to remedy problems and demanded his retention. The main contractor

(MC) employed others to produce expert opinion, corrective design and rectify the failure in that design. MC sued in

court for the repair work as damages for breach of contract, SC sued for the retention held. Following an investigation

it was clear through all the evidence that there had been a failure in design. The original proposal was under

designed, but agreed by all parties including the Employer at the outset. The design was SC's responsibility and this

fact was the overriding consideration in determining SC's liability. There followed a complex adjudication setting out

the claims of MC in a high burden of proof case of damages for breach of contract. There were complex scientific and

legal arguments levelled at SC's solicitors. It was proved that SC was liable for damages and the quantum was

proved in the expenditure by MC in altering the air conditioning system to the required level of design. SC had

previously commenced legal action for £13,000 for retention, this was offset against the award and the parties

dispensed with the court proceedings. The client was very pleased with the outcome.

Case Study No 8 - New Football Stadium - M&E Sub-Contract

Dispute Decision required a declaration as to whose "programme" applied and whether there was an entitlement to

an extension of time

Role Defending the main contractor (MC)

Result The MC programme applied and the claim failed

This dispute involved legal argument over which programme or programmes applied to the project long after it had

been completed. Although this sounds simple, it was far from it. The parties executed the sub-contract oddly some

three months after the works had reached practical completion. This included a programme, which defined the period

for completion and the basis for which the works would be completed. It was alleged by the claimant that this contract

document should be disregarded and that actual events alleged to have occurred in the claimant's own programmes

should take precedence based on intention and what they considered common sense. The implications were that if

the claimant's programmes applied there was a case for disruption and delay, extension of time entitlement plus

losses and expenses, these were valued at approximately £805,000 and would be claimed in a future adjudication.

The claimants were resisted on the grounds that firstly they had signed the contract, thus agreed to the MC

programme, secondly this signing has retrospective effect, thirdly the main contract completed on time and fourthly

the claimants had not taken heed of the clauses they had signed up to which included a condition precedent for the

service of notices for extensions of time, which were all absent. The signing of the contract thus precluded any claim

and the claim failed. This ended the pursuit of claim, indeed gave rise to a counterclaim, which was never

prosecuted. The final account was eventually resolved, whether a sum was paid is unknown.

Case Study No 9 - Retail/Flat Development, London - Main Contract

Dispute Payment of £140,000 on an interim account

Role Prosecuting the claim of the main contractor

Result The matter was settled mid-adjudication with a payment of £90,000

Acting for the main contractor, this case involved the preparation of a time and expense claim and prosecution of the

same together with the final account. An application for payment was submitted following submission of the claims

prepared, which were not responded to or withheld in the contact time required. Under JCT 98 design and build, the

payment mechanism is triggered by the submission of an application for payment. The Employer and his professional

team did not respond in any way to the claim submission by the final date for payment. At that juncture and most

different to most other contract forms, the application becomes the "sum due" under the contract. Adjudication was

commenced. Following a number of discussions and legal advice the client had to concede that he had to pay the full

amount claimed, thus prior to making a response, a settlement on the final account was reached to the complete

satisifaction of the client.

Case Study No 10 - Leisure Centre - Groundwork Sub-Contract

Dispute Payment of £115,000 for alleged loss and expense claimed in the interim

Role Defending the main contractor against the sub-contractor

Result The matter was settled mid-adjudication with a payment of £30,000

Acting for the main contractor, this case involved advising and defending a time and expense claim referred to

adjudication. The sub-contractor alleged numerous disruptions, which were recorded and claimed on daywork sheets.

These events were numerous but little more than an hour or day at a time for 10% of the work force on site. There

was no evidence that these events had an impact on the overall time and added to this the losses if any were

recovered in the daywork rates. Furthermore the adjudication had been brought prior to the expiry of the period

allowed of 16 weeks to make a decision on the extension of time. The claim brought on behalf of the sub-contractor

by a claims consultant was thus erroneous and naive. The claimants did not make a case for an event which did

cause delay to their works on the critical path, which had the potential to be raised. However, in any event it was

unlikely that linked loss/expense and mitigation would be demonstrated. Despite the strength of the defence case, the

client negotiated a final settlement with the claimant.

Case Study No 11 - Leisure Centre - Partitions & Ceilings Sub-Contract

Dispute Payment of £251,000 for the final account including EOT/loss and expense

Role Defending the main contractor (MC) against the sub-contractor (SC)

Result The claimant was awarded only £9,000 of the £251,000 claimed

Acting for the main contractor (MC), this case involved a rapid response defence to an adjudication brought by SC.

The case involved a large number of variations, together with an extension of time and loss/expense claim. Again the

claim was poorly presented by SC's claims consultants, there were a number of jurisdictional challenges and

contractual arguments, after which the adjudication barely survived, but set clearly the extent to which the decision

would be made. There were numerous exchanges of quantum argument on what was a re-measurement contract

and an intensive adjudicator's meeting. The claimant's quantum and claim was badly prepared and fell foul of the

simple dismissals for lack of evidence. This resulted in an award of only £9,000 including interest, representing a

significant success for the client.

Case Study No 11 - Adjudication No2

Following SC's failure to succeed with their claim, a detailed delay analysis, extension of time application and

valuation of loss and expense was served on MC. This led to a second adjudication when SC refused to accept that

the final account had been ascertained and finally adjudicated. The adjudicator from the first adjudication was

appointed by agreement, then he was asked to resign immediately. There followed several detailed legal arguments

on jurisdiction in respect of previously adjudicated matters, previously adjudicated final account value, definitions and

distinctions between "valuation" and "payment", plus the defeat of an argument that reassessed extensions of time

can be submitted to successive adjudications, but only as a defence not as a claim. The adjudicator accepted the

arguments in their entirety and he resigned. The claim by SC failed and no further claims have been made giving

complete final satisfaction to the client.

Case Study No 12 - New Offices - Main Contract

Dispute Payment of £121,000 for the final account including retention and the issue of the notice of completion of

making good defects

Role Prosecuting the claim of the main contractor (MC) against the Employer (E)

Result MC was awarded the claim in full and a declaration that the notice of completion of making good defects

should have been issued on a certain date

After lengthy attempts to obtain the notice of completion of making good defects and thereafter the second moiety of

retention, adjudication was commenced. The final account was agreed, but retention was being held. Defects were

agreed by the Architect as being complete, with a promise to issue the formal notice in evidence. The Employer then

attempted to retain the retention on the basis of allegations over a defective AHU unit alleging it was under-designed.

However, the Employer failed to appreciate that the specified ventilation installation to the two-storey building

excluded the ground floor entirely as the tenant would carry out a separate fit out. The AHU was installed as specified

thus no defective desing could be argued. An outright win for the client.

Case Study No 13 - HMP Works - Groundwork Sub-Contract

Dispute Payment of £165,000 for the final account

Role Defending the main contractor(MC) against the sub-contractor (SC)

Result The adjudicator awarded £25,000

Acting for MC, this case involved a rapid response defence to an adjudication brought by SC. The case involved

argument over the liability and quantum of a groundwork sub-contract final account including losses and expenses.

There were also arguments as to what terms applied including discount. The claim should have failed given the

quality of the submissions, however the adjudicator made a sympathetic small award. The client chose not to

challenge the award and accepted the result.

Case Study No 14 - Housing Development - Brickwork Sub-Contractor

Dispute Payment of £134,000 for the final account

Role Defending the main contractor(MC) against the sub-contractor (SC)

Result The parties settled for an undisclosed sum prior to the decision

Acting for the main contractor (MC), this case was probably one of the most involved of all cases despite a decision

not being reached by the adjudicator due to party settlement. A high profile firm of construction solicitors acted for the

claimant, there followed lengthy exchanges, which extended to the fourth submission and numerous witness

statements from both sides. The main crux of claim was for loss of profit as the brickwork sub-contract had not been

employed in an intended second phase. There was a bespoke contract implied, which referred to several sets of

conditions, which in turn contradicted each other, thus the contract was clearly in "no-mans land". It was not clear

either whether or not the second phase had been promised to SC. Added to all these factors there was numerous

contra-charges, losses and expenses, variation values, almost every aspect of account in dispute. The legal

arguments were numerous and interesting including arguments as to the interpretation of the contract and the law on

repudiation and entitlement to profit loss. From an intellectual point of view it was disappointing not to obtain a

decision, but professionally the client was satisifed with the outcome.

Case Study No 15 - New Fire Station & Retail Units - Cladding Sub-Contract

Dispute Payment of £240,000 for the final account

Role Defending the main contractor (MC) against the sub-contractor (SC)

Result Award of £31,000

Acting for the main contractor (MC), this case involved a defence to an adjudication brought by SC. The case

involved an argument to an entitlement to extension of time and losses and expenses arising under the contract. This

was a major project involving four complex phases and sectional completions, the project was delayed but the

reasons for those delays and what the actual terms of sectional completion were, was vague. The loss and expense

had been submitted in the main on a global basis, however the increases in costs of materials had been

demonstrated in some detail. Errors and poor claim preparation by SC allowed the jurisdiction of the adjudicator to be

limited to providing a value of the loss and expense element and a value of the extension of time element, but no

other element. Thus the adjudicator was precluded from making a payment order only a valuation. Given the poor

quality of the claim and the adjudicator's numerous questions, it became apparent that the Adjudicator was making

his own assessment of the extension of time. This kind of assessment is not possible unless both parties have had

the opportunity to comment on the evaluation as per the precedent set by Balfour Beatty v The London Borough of

Lambeth. No opportunity was offered, thus the client could have argued that the decision was unenforceable.

However, the money award was for £31,000 significantly less than claimed, thus the client used the adjudication to

broker a final settlement instead.

Case Study No 16 - Flat Development - Structural Warranty

Dispute Failure to provide design warranty under the contract

Role Prosecuting the claim for the main contractor (MC) against a design consultant (DC)

Result Declared that DC were in breach and must issue a warranty forthwith

Acting for MC this case involved a declaration that DC were in breach of contract for not issuing the required design

warranty when requested and that the warranty should be issued forthwith. MC did not obtain a formally signed

document, but did obtain agreement by exchanges albeit for two very minor terms. DC employed high profile

construction solicitors, who argued that there was no jurisdiction and submitted detailed legal arguments that there

was no contract. In reply these arguments were comprehensively defeated, the adjudicator finding for MC in every

respect. A warranty had to be issued. The implications of this were that MC considered DC liable for professional

negligence due to losses sustained on the project and MC would on receipt of the warranty seek to make a claim

upward of £1 million in respect of damages for the negligence sustained.

Cast Study No 17 - New Head Office Building - Partitioning Sub-Contractor

Dispute Non-Payment of Valuation

Role Acting on behalf of the sub-contractor in claiming unpaid sums

Result Sub-contractor received substantial payment

A small sub-contractor working for a main contractor encountered difficulties in securing payment for work completed

and eventually handed over to the Employer. Arbicon were instructed to recover the sub-contractor's rightful

entitlement, which commenced with letters 'crystallising' the dispute and outlining the statement of case for the sub-

contractor. Arbicon proceeded to adjudication when they successfully secured a substantial payment for the

aggrieved sub-contractor and enabled a swift settlement of the dispute. The delighted sub-contractor was able to

concentrate on his business whilst the matter proceeded, causing least disruption to his business. The sub-contractor

continued to retain Arbicon for future commercial and legal support on an ongoing basis.

Chartered Quantity Surveying Cases

A Main Contractor required commercial support on a £5million project, where the site-based Quantity Surveyor was

leaving for an overseas position, enticed by the tax-free status abroad. Arbicon were rapidly able to replace the site-

based Quantity Surveyor with a senior Quantity Surveyor and provided further office-based commercial support

allowing the project to complete successfully to time and budget.

A National Main Contractor was successful in securing a £10million project, however prior to commencement the

tenant required significant alterations to the layout of the store. Arbicon were able to provide Quantity Surveying

support to assess the changes, value the affect of these changes and negotiate the variation to the Contract, arising

from these alterations. Arbicon were able to provide Quantity Surveying support to the entire project, on a lump sum

fee basis subject only to variations, continuing to Practical Completion. Site-based and office-based Quantity

Surveying support allowed the project to complete successfully to budget and on time.

A large Main Contractor required support on key tenders, where the volume of enquiries had exceeded their internal

resource. Arbicon were able to provide this support and upon successfully securing a key tender were able to

seamlessly provide Quantity Surveying services to the project on site. The post contract services were provided on a

lump sum fee, giving certainty to this element of the project costs.