Dealing with £7m LD’s risk

We were commissioned by one of the UK's leading independent engineering and services businesses to lead their recovery of time delays and associated costs on a logistics and distribution project. There were numerous issues which we need to understand which included the way that different phases had been incorporated into the contract as different sectional completion dates, the late and staggered provision of access into areas by the main contractor, and the employer gaining beneficial access of areas ahead of the contract completion date.

There were significant claims made by both sides so the financial outcome of this project by our client was dependent on these delay related issues.

Our approach

Given the extent of their history on the project, we immediately built rapport and understanding with the operational and commercial teams on the project as their knowledge and documents would be crucial to our collective success.

We worked with our client’s legal team to undertake a review of the contract provisions to ascertain our client’s rights and obligations relating to extensions of time, recovery of costs, and liability for damages. When we concluded that review, we analysed this against the project dates and calculated that our client had exposure to £5m plus in damages, if it was not granted any extension of time.

We led a process that initially involved establishing the events which the project team said had caused delay along with any relevant records. We worked with our client’s planning director and planning team to provide the information necessary for them to undertake an analysis of the delay.

Through that dialogue it became apparent that there were some strengths in our client’s position but also some weaknesses. For example, there were deficiencies in the baseline programme which made it difficult to demonstrate the full impact of certain events. Additionally, the programme had not always been maintained so there were gaps in progress and as-built information, and variations had not been included.

Our advice

We convened a meeting with our client to present the analysis and identify these strengths and weaknesses. This helped to promote an objective discussion about how the project should be reporting financially and the next steps that should be taken to resolve the dispute with the main contractor. This led to a discussion about an approach that would place our client in the best possible negotiating position and an agreed view that the optimum financial outcome would be achieved through a negotiated settlement.

The outcome

We prepared a valuation of the claim and a claim document with all supporting particulars which was issued to the main contractor and will provide a strong foundation for our client in their settlement discussions.

Whilst our primary skillset is the preparation of a valuation of the matters in dispute, it was our wider knowledge of the issues, the way we worked seamlessly with our client’s project team and internal functions, and our objective advice to their leadership about the optimum route to resolution that delivered value to our client.