Quantifying Prolongation Costs After 35 Years

Quantifying Prolongation Costs: After 35 Years, New Solutions And New Challenges Presented by: Dr. Champion Date: 18 November 2022 Of Then And Now... - - JCT 1980: • "Direct loss and/or expense" not defined • Recovery of additional costs incurred (akin to damages) FIDIC • - - - - Practices • Long, 'forensic' evaluation by QS • Adoption of Hudson, Emden formulae for Head Office overhead losses JCT 2016: • unchanged... see 1980 • Some use of agreement in advance? NEC4 • Additional Defined Cost + Fee • Addition is determined by program Limited by: Disallowed cost; time bar FIDIC (2017): • - Similar, cost based. FIDIC (2021) Green Book • - Similar, cost based. Contractor reimbursed a liquidated amount per week for delays Trend towards: • Prescription, Formulae • Refle LD, Ind • Liquidated approximations • Avoiding detailed QS evaluation Some 2022 Challenges - What if part of a project is due to be manufactured off-site but, due to design delays, the production slot is lost? Liability for the entire rescheduling loss? (e.g. Timber framed housing) - On a major project with multiple parts, is the party that delays a minor part responsible for delays to the entire project? • Relevant also to liability of professionals on D&B projects • Is part of delay cost too remote? "if that type of loss could not reasonably have been contemplated by the defendant as a serious possibility ..."  See The Achilleas (2009) AC 61; Attorney General of the Virgin Islands v Global Water Associates Ltd [2020] UKPC 18; [2021] AC 23 - Staff 'allocated' to a project (wfh?) Quantum ... What? - Quantum Meruit • a species of assumpsit (though not of inebriates assumpsit.)  Compare: money had and received to the plaintiff's use. • Two types  Contractual (Six Carpenters' Case)  Non-contractual (Planché v Colburn(?) (1831) 8 Bing. 14). • But what is the difference? Or: how do you tell one from the other?  'If one bid me do work for him, and do not promise anything for it, in this case the law supplied the promise' (The Six Carpenters' Case (1610) 8 Co. Rep. 146 at 147.) Non-Contractual QM - Mann v Paterson Constructions Pty Ltd [2019] HCA 32 (HC (Aus)) (cf. Taylor v Motability Finance Ltd [2004] EWHC 2619 (Comm); [2004] All E.R. (D) 341.) - Facts • C agrees to build two houses for a price of $971k, with payment in stages. • Before completion, D repudiates. C accepts the repudiation. - Question: Can C claim more than $971k by means of a non-contractual QM? - High Court of Australia • Unanimous: where debt accrued, C is limited to the agreed sum. • Split: where no debt accrued.  Minority (Kiefel CJ, Bell and Keane JJ): never a claim in unjust enrichment.  Plurality (Nettle, Gordon & Edelman JJ, and Gageler J): sometimes. Questions - Is there a difference between claims for the value of work (QM) as opposed to claims for restitution of money paid (MHR)? If so, why? - What if the contract is unenforceable? (Pavey) - English law on the contract/unjust enrichment borderline: Dargamo Holdings Ltd v Avonwick Holdings Ltd [2021] EWCA Civ 1149 • Allegation of total failure of consideration (sc. money had and received) • CA: there is no unjust enrichment claim if there is no 'space' for such a claim; and there is no space for such a claim (it seems?) just in case the elements of such a claim are not made out. (Compare: an analysis which says the elements are made out but trumped by the contract.) Contractual QM - Barton v Gwyn-Jones: likely to be the leading contractual QM claim: currently reserved before the SC (heard on 2 November 2022). - Facts • D agrees to pay C £1.2m if (?and only if) C introduces a purchaser for D's land who was willing to pay £6.5m • C introduces X. X purchases the land for £6m. • D refuses to pay C - HHJ Pearce: nothing owed. - Court of Appeal • Asplin and Males LJJ: unjust enrichment claim available. • Davis LJ: contractual claim available. ('if, not 'and only if) Some Conclusions To Draw - Construction management is changing - less on site, more work in factories. Delays have new, different, consequences. Costs harder to quantify - Insufficient research into what contract provisions work/don't work? - Of standard forms: - • Use of prescriptive contract 'solutions' increasing, but can't solve all points. • Reversion to common law can arise. • JCT forms - not responding to changing needs? Teaching construction law • Contract forms - longer, more complexity • Teaching - Split needs:  Practitioner - awareness and contract administration  Advanced-why provisions are underlying policy considerations • Curriculum refresh needed?