Resolved Without Adjudication – A Lesson in Understanding Construction Delay
A healthcare scheme claim settled at less than a quarter of the original demand, without adjudication.
The Background
Optimum Resolution was instructed to assess and respond to a Loss and Expense and Extension of Time claim brought by a contractor on a healthcare scheme. The claim alleged that delays arose from external factors, including power connections, statutory approvals, and utility works, amounting to hundreds of thousands of pounds in additional costs.
Our Analysis
We carried out a comprehensive, independent review and produced a detailed contractual and programming report. Our investigation revealed:
- No valid Extension of Time (EOT) had ever been applied for or granted for the key building delay, extinguishing entitlement to Loss and Expense.
- Claimed delays to the building were poorly evidenced, contradicted by contemporaneous records, and in some cases, shown to be self-inflicted.
- There was a complete misunderstanding of how concurrency works, key to evaluating any entitlement to time or money under the JCT Design and Build 2016 contract.
- Costs were inflated and based on outdated, theoretical calculations (notably the Hudson Formula), with no effort made to substantiate actual financial loss.
We provided a clear position that only a small proportion of the claim could be justified, less than 25% of the contractor’s original demand.
The response to our report
The contractor’s legal team issued a formal rebuttal. The points in dispute included the relationship between time and money entitlements, condition precedent clauses and timely notification of delay, and the practical evidence of programming, sequencing and causation.
The Resolution
Following our engagement and clarification of the contractor’s errors, a meeting was held between the parties. No Adjudication was necessary. The dispute was resolved amicably at less than a quarter of the original claim.
Optimum’s role
We reviewed the contractual and programming position, assessed the evidence supporting the Loss and Expense and Extension of Time claim, and set out our findings before the parties reached a settlement.
