David J. Howell, James Rogers and Stephen Burke
November 24, 2009
In Costain Limited v. Charles Haswell & Partners Limited, Costain engaged Haswell to advise on the design of suitable foundations for a water treatment plant. Haswell's recommendations were incorporated into Costain's tender. Subsequent analysis showed the design was inadequate. Haswell recommended a new design using piled foundations. Costain proceeded with that rectification work and commenced proceedings against Haswell seeking the resulting prolongation costs.
The English Technology and Construction Court held that Haswell was negligently in breach of its professional duty to exercise reasonable care and skill in providing its original design. The Haswell engineer who carried out the relevant design work was not sufficiently experienced, nor appropriately supervised.
Despite establishing liability, Costain failed to provide sufficient evidence to show that the delay to the project while the piled foundations were installed had resulted in a similar delay to the project completion date.
Claim for Prolongation Costs
The parties had each engaged programming experts. Both experts agreed that a "time impact" analysis was the most appropriate method to assess delay and they agreed upon a baseline programme, in addition to as-built data. Both experts agreed that the construction of the piled foundations was on the critical path and had resulted in a critical delay to the project. Both agreed that, in the absence of subsequent mitigation or acceleration by Costain, the delays caused by Haswell's negligent design would result in a similar length of delay to the project as a whole.
However, both experts had only considered the period up to the time when the design and installation of the piled foundations was complete. They had not conducted any analysis of the impact on the project completion date of a number of other causes, which were not the responsibility of Haswell and which had affected other structures on the site. Costain was therefore unable to satisfy the Court that Haswell's negligence was the cause of an equivalent period of delay to the project completion date:
"In the absence of any analysis between all the operative delays from the start to the finish, which is absent in this case, in my judgment it is simply not possible for the Court to be satisfied on the balance of probabilities that the assumption upon which this part of Costain's case depends, is correct."
Costain therefore failed in its claim for prolongation costs in the amount of the general site costs for the whole project equivalent to the period of delay for completing the construction of the piled foundations. It only recovered the additional costs of installing the piled foundations, assessed by reference to the extra cost Costain would likely have included in its tender had it properly been advised by Haswell to use piled foundations from the outset. (That amount was less than the cost to Costain of installing the piled foundations.)
This case emphasises the importance of supporting a delay claim by a sufficient delay analysis wherever this is possible. Under many standard forms of construction contract the contract administrator will be required to assess the effects of delay prospectively. In the context of claims for delay in litigation or arbitration, the analysis may have to be conducted retrospectively by a variety of delay analysis methods ("impacted as planned"; "as planned v. as-built"; "collapsed as-built"; "windows analysis"; "time impact" or "time slice"). In all cases the claimant will normally have the burden of proof in establishing that a particular delay has resulted in the prolongation damages claimed. This in turn emphasises the need for adequate scheduling and programming practices during the project, to allow the appropriate delay analysis to be carried out in the event a delay claim arises.
This article was prepared by David J. Howell (+44 20 7832 3605 or firstname.lastname@example.org), Partner and Co-chair of the firm's Construction Practice Group, James Rogers (+44 20 7832 3616 or email@example.com), a Senior Associate, and Stephen Burke (+44 20 7832 3686 or firstname.lastname@example.org), an Associate, all of Fulbright & Jaworski's London office. For further information please contact any of the authors listed above.
  EWHC B25 (TCC)
David J. Howell