Richard Wade from Blake Morgan talked about The Walter Lilly case and the lessons learnt at Blake Morgan and Rund's Construction update seminar on 5 November 2014 in Southampton.

1. The Walter Lilly Case – some harsh lessons learned
Richard Wade
Head of Construction

2. Introduction
•Case principally dealing with time-related claims
•Could equally be entitled “how not to run a project”
•Important elements of case:-
–Background
–Nature of the problems
–Judge’s assessment of evidence (in particular the individuals involved)
–Some harsh lessons learned

3. Background
•Large new building project in prime London location
•Private developer (Mr Mackay together with associated company, DMW)
•Early engagement of contractor (Walter Lilly) before completion of any significant design
•Traditional form of contract used – JCT98

4. Background (2)
•Substantial delays
•In-fighting between employer and members of its team including serious falling out with architect
•Major issues arising around “global claims” and “concurrent delays”
•Protracted (and bitter) dispute between employer and contractor leading to 16 day trial in Spring 2012

5. Nature of claims
•Lengthy list of issues in dispute, primarily comprising:-
–Defects (including question of responsibility for design); multiple complaints by employer
–Delays and entitlement to extensions of time; detailed analysis of ‘concurrency’. Henry Boot –v- Malmaison applied; terminal blow for City Inn –v- Shepherd?
•Outcome? Landslide decision for contractor (some £2.3 million plus substantial costs)

6. Contemplation of evidence
•Role of expert witnesses – detailed consideration given by Judge on completing evidence, especially on analysis of causes of delay
•Importance of factual evidence; in particular evidence of Mr Mackay and his method of “negotiation”; unusual step of quoting, extensively, Mr Mackay’s e-mail correspondence within the judgment
•Judge’s assessment of Mr Mackay:-
–“Clearly astute but very forceful”
–“He is a person who is used to getting his own way”
–“His behaviour towards the architects, WLC and other consultants was not simply coarse, it was combative, bullying and aggressive and contributed very substantially to the problems on the project”

7. Lessons learned
1.Keep good records – avoid risk of having to deal with global claims
2.Get good experts
3.Every case is unique – note some of the criticisms of the importance attached to this case since judgment delivered
4.Beware of committing innermost thoughts to emails – always assume that they could ultimately be read by a Judge!