The latest of Damian’s ‘Expert Secrets’ anecdotal pieces. Here, Damian takes a look at the importance of good valuation in resolving disputes.
Damian received an appointment as expert for a well-known rail provider. In the dispute, he was asked to quantify the contractor’s claims for losses arising from standing time and disruption. The rail provider’s concern focussed on a high valuation from the contractor.
The Importance of the Contract
The claimant contractor had quantified the values at $84 million. Damian determined that he must apply his mind to the strict provisions of the amended NEC contract.
In doing so, Damian quantified the resulting value of standing time and disruption at three million dollars. This was clearly, a long way from the figure the amount the claimant contractor hoped to achieve and likely to be difficult to resolve.
In a fit of pique, the rail provider called Damian to their office to discuss his valuation with the instructing lawyers.
In the interim period the rail provider had quantified its own valuation. They had reached a sum of $25 million and wished to tender an offer.
Damian met with the rail provider and the legal team, to present his findings during a two-day workshop. As a result of the workshop, despite some risk concerns, it was decided that the team proceed without the tender offer of $25m.
At adjudication, the adjudicator suggested that Damian’s value was conservative. He went as far as to say that Damian could have quantified a lower sum. The adjudicator accepted and awarded the value as quantified. As a result, the resolution of the dispute was far more successful than the respondent employer had hoped.
The correct interpretation of contract provisions is essential. This is particularly true, when quantifying compensation events under the NEC form. Any other interpretation may result in a ‘train wreck’ at adjudication.
If you need any assistance with construction adjudication, valuation or any of the issues raised in this article, get in touch today. Damian or one of the team at Damian James will be happy to talk to you.