Sunday, January 25, 2009

Bovis Lend Lease sues Harley St hospital for £4.2m

Bovis Lend Lease has embarked on a ВЈ4.2m legal battle with the trustees of the London Clinic Ltd, a charity which runs a Harley Street hospital, following a row over an ВЈ11.5m refurbishment contract which finished over a year late.

In a writ lodged in the Technology and Construction Court, Bovis alleges that the London Clinic has failed to pay the ВЈ4.2m which an adjudicator decided the contractor was owed when he found that Bovis was entitled to a time extension of 40.2 weeks.

The contract, which began in July 2004 and was built for a fixed price, started to overrun in October 2004.

Inviron, Bovis' M&E subcontractor, was due to begin services installation work on 8 October. Bovis claims that in order for this work to go ahead, London Clinic's design team needed to have designs ready for 23 April.


Bovis Lend Lease sues Harley St hospital for £4.2m


But Bovis alleges that the designs were issued late, and M&E installation could not begin until May 2005 - 26.5 weeks late.

On top of that, there were further delays during the final period of the contract, which the contractor alleges were due to "numerous and far-reaching" design changes.

Bovis says it made several applications for extensions of time, but was only granted an extension of 4 weeks in March 2005. Practical completion was reached in August 2006 - 54 weeks late.

At this point, London Clinics charged Bovis for Liquidated and Ascertained Damages at the contractual rate of ВЈ40,000 per week, which Bovis claims was unjustified.

Adjudicator Tony Bingham decided in November last year that Bovis was in fact entitled to a time extension of 44.2 weeks (including the 4 weeks it had already been awarded). He also ordered London Clinics to repay the Liquidated and Ascertained Damages deducted in the 40.2 week period. London Clinics was told to pay a total sum of nearly ВЈ4.2m within 14 days of the decision.

But Bovis alleges that London Clinics has failed to pay and has indicated that it does not intend to pay. It is now seeking to recover the cash through the courts.

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