Friday, December 19, 2008

Busy 2008 for dispute resolution specialist PJ English

Dispute resolution specialist Peter English says he has won ВЈ8m for his clients this year, and he anticipates that figure jumping to ВЈ11m in 2009.

His group, PJ English Associates, is currently working on 74 cases which represents a substantial increase on the figure of 15 at the same time last year.

“A lot of our work has stemmed from the high-profile case we handled on behalf of Southern Glass Services,” said English after an adjudicator ruled (10 months ago) that the 3% deductions from agreed payment terms being summarily removed by Barratt Southampton were out of order.

The money involved (ВЈ19,000) was paid back along with a further ВЈ5,400 to cover interest charges

Interestingly, after that debacle, Barratt has become one of the good guys and not a single case on English’s current schedule bears the name Barratt.

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Busy 2008 for dispute resolution specialist PJ English

 

Two of his largest cases at the moment involve acting for a groundwork contractor who claims to be owed money on two scores: ВЈ500,000 from a major house builder and another from a smaller contractor.

“The larger players are not bowing down like they might have done in the past,” said English.

“However smaller players, who are owed £8,000 to £12,000 perhaps, are still caving in and adopting the stance that they will live with the problem and try to work through it.

“I’d say all the house builders are currently trying it on apart.

“The others are knocking 5% irrespective off what their agree payment terms say.

“Another trick is for them to close a site when the scheme is only halfway through, then challenging their subcontractors to take them to court for breach and putting every obstacle in the way."

However, larger subcontractors are wising up, according to English. “They are saying вЂget stuffed – we’ll see you in court’ because they know they will win the court case,” he reports.

Of the 74 cases on English’s books at the moment, 38 are into the litigation or adjudication phase.

The balance, where the two sides have failed to settle amicably, are mostly waiting for a further input of effort or clarification before advice can be given on how best to handle them.

English expects half of this balance to eventually go into adjudication.

“In all , I’d expect to see 50-plus of our 74 cases being resolved by way of adjudication,” he said, “with another five or six being taken to court.”

English thinks most cases are in the bag even before he steps through the courtroom door simply because 80% of main contractors who summarily hang on to money they should pay out fail to issue a withholding notice (a legal necessity) which means it's almost game over before the bell sounds for the start of the formal sparring.






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Thursday, December 18, 2008

Multiplex launches record £250m claim against Mott MacDonald

Multiplex has launched a ВЈ250m High Court claim against Mott MacDonald, as the fallout from the Wembley stadium debacle rumbles on.

The writ, anticipated since early this year, alleges that Mott MacDonald failed to prepare a steelwork design that could be produced within the cost plan.

The contractor, which has since been renamed as Brookfield, also alleges that Mott MacDonald made a series of design changes which were beyond the scope of normal design development.

Mott MacDonald has always denied any responsibility for problems on the ВЈ757m stadium, which was completed over a year late.

Multiplex is still locked in a battle with Darlington-based Cleveland Bridge, although it has now settled its dispute with PC Harrington.

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Multiplex launches record £250m claim against Mott MacDonald

 

In a statement, Mott MacDonald said: "Mott MacDonald confirms that it has received a claim from Brookfield Construction (UK) Limited (formerly Multiplex Constructions (UK) Limited) against it as leader of the Mott Stadium Consortium (MSC), alleging breaches of contract in relation to structural engineering design work undertaken on Wembley Stadium by the consortium’s members.
 
"We would point out that Brookfield assumed responsibility for designing and building the stadium and MSC provided structural design consultancy services to Brookfield for the permanent structure.

"MSC was not responsible for project management or construction, which was the clear responsibility of Brookfield. We are in no doubt that MSC performed its obligations to Brookfield professionally and diligently.

"Mott MacDonald emphatically denies any liability for Brookfield’s loss and will vigorously defend the claim.
 
"We do not wish to comment in detail on any figures mentioned in the claim except to say they are not credible.

"We are confident that we will demonstrate that MSC fulfilled its obligations and has no liability for any loss Brookfield may have incurred."






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Wednesday, December 17, 2008

OFT issues new guidelines on busting cartels

Cartel busters at the Office of Fair Trading (OFT) are making it easier for contractors to report on anti-competitive behaviour.

Companies involved in price-fixing rings can avoid hefty fines if they blow the whistle on their fellow conspirators.

Officials at the OFT have now launched new leniency guidelines outlining easier ways for firms to get in touch and detailing how they will be exempt from massive fines and criminal prosecutions.

Simon Williams, OFT senior director of cartels and criminal enforcement, said: "Cartels cheat consumers by restricting competition.

"The leniency programme continues to be a simple and powerful tool to expose such conduct and the revisions to the OFT's guidance will help ensure that the programme continues to provide a powerful incentive to seek leniency before it is too late."






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Monday, December 15, 2008

Carillion faces £21m counter sue over Bath Spa project

Carillion and architect Nicholas Grimshaw & Partners are being counter sued for ВЈ21m by Bath & North-East Somerset (BANES) Council over the Thermae Bath Spa project.

The beleaguered ВЈ45m project suffered a catalogue of delays finally completing in 2006 three years late and ВЈ27m over budget.

Mowlem, which is now part of Carillion, was the main contractor. Since its opening Bath Spa has been plagued with technical problems including condensation, clouds of mould on the walls and faulty foot spas.

The council’s court action follows Carillion’s move in August to sue BANES for £2.4m.

In a statement BANES said: “The council’s position is that significant costs which it incurred in relation to the Bath Spa are the result of design and/or workmanship issues, for which Carillion and/or Nicholas Grimshaw & Partners (NGP) are responsible.”

Carillion and NGP were unavailable for comment as CJ went to press.






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Winding-up notice issued to Strand developer as subbies left unpaid

Knight Build has issued an insolvency notice against Urvasco in the latest chapter of the Strand hotel dispute.

Work is currently on hold at the former Marconi Hotel on London’s strand where the first UK venture for the Spanish Silken Hotel group had been underway.

The project has been plagued by legal problems since work begain. O’Keefe Construction (Greenwich) filed a claim against Cantillion for monies owed for demolition, while Cantillion filed a counter claim.

Now, having already won one adjudication for ВЈ320,000, Knight Build has been forced to issue a winding up notice against developer Urvasco to collect a further ВЈ70,000.

In the original case the high court was shown bank statements indicating the developer had no other money.

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Winding-up notice issued to Strand developer as subbies left unpaid

 

Urvasco still owes tens of millions to the various other contractors on the job. They include Buro Happold, H+B Scaffolding, Crown Lifts, Severfield Rowen and project architect Foster and Partners.

One contractor, who declined to be named, said: “No-one has been paid and there’s nothing happening on site. Subbies have been told to leave and have gone leaving materials everywhere. It’s a health and safety nightmare.”

The hearing is set for February 2009.






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Thursday, December 11, 2008

Laing O'Rourke facing legal battle over Marbella development

Laing O’Rourke faces a potential winding-up order in the Irish courts following a dispute with Irish developer John Magnier.

The Times reported that Magnier, Ireland's seventh-richest man, is considering a "cease trade" order, after Laing O'Rourke refused to pay ВЈ3m awarded to him in a court ruling last week.

The dispute centres on a property development that Magnier and O'Rourke were planning in Marbella, Spain.

The contractor was using a special purpose vehicle called Explore Investments to buy half of a 4ha tract of land in the resort, which was owned by Magnier's companies Daltwo Holdings and Marbetwo Holdings.

The plan was to develop the land, one of the few remaining plots boasting a beach frontage still to be developed, as part of a joint venture.

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Laing ORourke facing legal battle over Marbella development

 

But problems began when planners decided that only two villas could be built on the site, rather than the 30 the jv partners had envisaged.

Laing O'Rourke agreed to pay nearly ВЈ22m for the plot, to be paid in stages. But it withheld the latest instalment of ВЈ3m as it became aware that the planners' decision meant the development was no longer commercially viable.

Several more instalments are due until 2011.

Magnier’s companies intend to request a “cease trade” order – Ireland’s equivalent of a winding-up order – if the payment they claim they are owed is not made within 21 days.

A Laing O'Rourke spokesman said: “The Laing O’Rourke Group confirms it will be providing in full for the €3 million loan due from its subsidiary, Explore Investments [No 2], following a judgment entered against that company by an Irish court. This provision will have no material effect on the group’s trading results for the year. Explore Investments [No 2] has no interests other than an investment in a single project in Spain.”






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One in 10 OFT probe firms in administration or liquidation

One in 10 of the contractors named in the OFT's cover pricing investigation has fallen victim to serious financial problems or ceased to trade.

Of the 112 contractors named in April's Statement of Objections (SO), a total of 10 are now in administration or liquidation, after York House Construction called in administrators last month (see list below).

The high proportion of struggling and failed businesses among the group of accused has sparked fears that high levels of fines from the OFT, expected to be announced in the early part of 2009, could send even more companies under.

The OFT has the power to fine a company up to 10% of its relevant turnover if it is found guily of fraudulent bidding practices.

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One in 10 OFT probe firms in administration or liquidation

 

A spokesman for the Construction Confederation said: "The industry is on a downward trend and there are quite a few companies on the list of the original 112 which are in difficulty or in administration.

"This probably doesn't come into the OFT's criteria when it is thinking of what penalties to impose.

"But we think that it should be a consideration.

"The impact of the level of fines it imposes on the industry is going to be significant."

Adrian Magnus, a competition partner with law firm Berwin Leighton Paisner said: "The challenge is that the OFT will want to have a fine commensurate with the size and importance of the investigation.

"But if it were to impose a fine that put more construction companies into administration or liquidation, then is that really in the wider interest of UK plc?"

The OFT declined to comment on the investigation.

Where are they now?Ballast - dissolved by Dutch parent Ballast NedamChase Norton Construction - administration, July 2008Frudd Construction - liquidation, July 2008G. Carter Construction - liquidation, March 2008Holroyd Construction Group - administration, June 2008Lotus Construction - administration, November 2008Piper Construction Midlands - liquidation, November 2008Thomas Fish & Sons - trading under new ownership following administration, April 2008Thorndyke - liquidationWilliam Sapcote and Sons - administration, October 2007York House Construction - administration, November 2008




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