The firm’s most successful dispute resolutions are often those without formal proceedings. An example of this is the ‘R’ building.


A contractor was appointed to construct a building in London. It encountered difficulties during construction and eventually ceased making effective progress towards completion. This led to its employment under the contract being terminated. Shortly afterwards the contractor went into administration, and then liquidation.

The requisite ‘statement of account’ was subsequently issued. This showed that an amount was due to the employer due to costs incurred following the termination of the contractor’s employment.

The statement was not a final account statement, so not subject to the same ‘finality’ deadlines.

Approximately two years later the contractor’s liquidator submitted a claim to the employer seeking payment of a further c.£2 million. The liquidator’s letter supported a 230-page claim (together with numerous appendices in several lever arch files). The employer wanted a view of the claim’s viability that was unencumbered by previous involvement in the project.

Expert Appointment

Tony Hunter, the partner in the firm who leads on dispute resolution matters, was appointed to review the quantum aspects of the claim.

The quantum claim asserting entitlement to the additional c.£2 million payment was based on:

  •  Valuation of variations
  •  Adjustment of provisional quantities
  •  Adjustment of ‘undefined’ provisional sums
  •  Design fees for contractor-designed work
  •  Risk for contractor-designed work
  •  Management and attendance on work undertaken by employer-directly appointed contractors
  •  Loss and expense for project prolongation, increased management resources (‘thickening’) and disruption

The most effective way to respond to the claim was considered in consultation with the employer and his solicitor. Naturally, there was concern about incurring significant fees if a comprehensive analysis occurred. This resulted in the adoption of a ‘top-down’ approach involved an initial review of the claim. The aim was to assess the claim’s credibility and determine the extent of further development. With the ability to develop that review into a full response, the findings or instigation of proceedings required it.

Quantum Analysis

The following was undertaken or considered:

  •  Comparison and reconciliation exercise between the contractor’s claim and the statement of account.
  •  Review of the differences between the statement of account and the claim.
  •  Consideration of the differences between the contractor’s and QS’s contemporaneous valuations at the time of termination of the contractor’s employment.
  •  Quantum issues regarding the design element within the contract.
  •  The effect of value engineering exercises undertaken prior, to and subsequent, to contract award.
  •  Quantum issues relating to ‘undefined’ provisional sums; noting bespoke amendments made to the contract.
  •  Provision of notices for loss and expense.
  •  Requirements for, and ascertainment of, loss and expense.
  •  Costs incurred by the employer due to the termination of the contractor’s employment.

This review identified significant flaws in the loss and expense claim; both in the quantum and liability assertions. Regarding the claim in general, it concluded that some relatively minor amounts were identified as due or upon further review. All indications are that the residual figure would still result in an amount due to the employer.

Dispute Resolution

Adjudication was not a viable method of dispute resolution for the claimant due to difficulties with enforcing any award. This was because the contractor (the party to the contract) was in liquidation. Litigation remained as the only recourse. Therefore, the key question was, ‘What was the most effective way to present the review findings to the claimant while minimising the risk of incurring further expenditure related to their claim?’

The investigation determined that the liquidator had no funds. It was also unlikely that the consultant who prepared the claim did so without any payment. It was therefore concluded that someone was funding the claim in return for a ‘cut’ of any recovery. It was this ‘funder’ that needed to be convinced of the futility of pursuing the claim further.

The decision not to issue the quantum report to the claimant could then be critiqued for revising their claim. Such criticism might lead to additional expenses for the employer during subsequent reviews, especially if the claim is resubmitted. Accordingly the claimant’s team, including (most importantly) the funder, was invited to attend a presentation of the team’s review. This ensured that the funder fully understood the shortcomings in the claim. In turn, this allowed for dialogue between the parties to reinforce the point.


Mr Hunter gave a PowerPoint presentation of his findings and the claimant’s team provided a summary. A full and frank exchange on the claim and its shortcomings ensued. The message delivered was that the claimant would need to be successful on several fronts to offset the current debt to the employer. This would need to occur before starting to generate any recovery. All indications were that this would not happen. The claimant would also need to incur significant costs to get to that point. Following the presentation, the solicitors corresponded and as a result, the claim was not pursued further.

The case study demonstrates the ability to determine and implement an economic but effective response when analysing and responding to a claim. Should you need assistance with dispute resolution, contact us today.