To Prove or to Disprove

by

Sir Robert Akenhead

A conference organised by
The Society of Construction Law Hong Kong
in Hong Kong on 19 May 2016

www.scl.hk
 TO PROVE OR TO DISPROVE

by

Sir Robert Akenhead

INTRODUCTION
1. Hamlet says: “To be or not to be, that is the question”. Litigation lawyers put it differently: “To prove or
to disprove, that may take a lot of questions and it all depends on getting the right answers”. Lawyers get
paid more the more words they use. Probably nine cases out of ten involve mostly factual issues; there
are of course a few cases in which millions turn on what a clause in a contract means but those are few
and far between. Therefore, in particular on construction and engineering contracts, it is seriously important
that parties and those advising them appreciate the need to have the evidence to prove or to challenge. I
do not mean by this that parties should be asked to invent or forge documents; some people try but they
usually get found out. Records as to what has happened, correspondence and meeting minutes or notes
are the key things but photographs tell a powerful story particularly if they have a date on them.

2. I am going to look at the following aspects of evidence;

A. How do you prove or disprove a fact or alleged fact?

B. Causation – how do courts or arbitrators deal with what causes what?

C. Technology as an aid to proof or disproof

D. Witnesses

E. Documents

F. Experts

A. How do you prove or disprove a fact or alleged fact?

B. Causation – how do courts or arbitrators deal with what causes what?

3. One needs to understand that courts and arbitrators require that the party putting forward a positive
factual case on anything has the burden or the job of establishing that case and the standard of proof is
the balance of probabilities. What in practice does the balance of probabilities mean? It means no more
than that the party seeking to prove must at least prove that the given fact probably happened; certainty
is good but is not essential.

4. Sometimes the balance of probabilities is expressed as 50.1% as opposed to 50:50; it will be rare however
for a tribunal to decide a case on the basis that it is so evenly balanced at 50:50 that the party which has
the burden of proof has not proved its case. Parties, and indeed lawyers, sometimes get lost in determining
what is meant by a balance of probabilities. It means in effect: more probable than not. One has to be a
little careful about applying Sherlock Holmes’ well-known saying:

“How often have I said to you that, when you have eliminated the impossible, whatever remains,
however improbable, must be the truth?”

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Sir Robert Akenhead

The reason one has to be cautious about this is because the Court or arbitrator always has an alternative,
which is to find that a fact or case has simply not been proved on the balance of probabilities (see e.g.
Rhesa Shipping Co v. Edmunds [1985] 1 WLR 948, 951A-G). Lord Brandon in that case said:

“No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so.
There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise,
deciding on the proof is the only just course for him to take.”

5. The reality is that tribunals give most weight to what was said and recorded at the time. Lord Atkin
commented in one case that, “an ounce of intrinsic merit or demerit in the evidence, that is to say, the
value of the comparison of evidence with known facts, is worth pounds of demeanour”. That means often
that the contemporaneous written evidence is most important. Rarely, a judge or arbitrator attaches weight
to the way a witness gives evidence; one reason is witnesses may be monotonous, not feeling well, nervous,
not speaking in their mother tongue or all of the above. The key government witness (in a dispute about
who had wrongfully terminated an East African dam project contract) wrote a letter at the time sending
out the minutes of a meeting which he had attended recording his words that there was no good reason
for the government’s delay in allowing the job to start but he later denied in oral evidence that he had
ever said it; when he was asked: “You either lied then or you are lying now, which is it?”, he refused to
answer and the arbitrator decided that his contemporaneous statement was true. The letter or e-mail which
records what was said or done which is not challenged by the recipient at the time is usually upheld. People
mostly do not lie or do not want to be seen to lie. Tribunals tend to give weight to the point that will always
be made in relation to there being no challenge to what was recorded at the time, which is that if it did
not happen or was not said if it was not true or accurate the recipient would have challenged it then, as
opposed to 4-5 years later in proceedings.

6. Tribunals need to resist the temptation of simply going for the more likely of several causes or explanations.
They must look at the evidence and decide, not what is most or more probable but what probably happened
or was said – there is a difference. Thus, it is not necessarily the case that simply because there are five
possible versions of what was done or said the most likely is necessarily the probable. This can be illustrated
by consideration of cases such as Fosse Motor Engineers v. Conde Nast [2008] EWHC 2037 (TCC). A
fire destroyed a warehouse. The fire experts were unable forensically to establish the cause from the debris
left from the fire. There were five possible causes of the fire:

(a) A cigarette carelessly discarded by one of four defendant’s agency workers present when the fire
broke out;

(b) A cigarette carelessly discarded earlier by someone else;

(c) An intruder (bent on arson) securing entry to the warehouse earlier;

(d) An intruder (bent on arson) entering the premises later; and

(e) Electrical equipment left by the heating contractors.

One side listed these in order as to what was most and least likely with percentages none of which exceeded
50%. In the Fosse case, the Court was satisfied on a balance of probabilities that the fire had not been caused
by one or more of the lady workers discarding a cigarette at a critical time, or indeed at all. In that sense, it
did not really matter how one ranked the strength of possibility of the other possible causes. The Court or
arbitrator is not in the position of a Public Enquiry which is seeking to determine what the cause of an accident
was. The Court or arbitrator must simply decide whether on a balance of probabilities the cause of any problem
was that contended for, usually, by the Claimant. As was said in the Fosse Motor case:

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“What is not acceptable, at the very least in a case like the current one, is to identify that there
are, say, (as here) five possible causes, rank them each in percentage terms as possibilities and
then select the possibility with the highest percentage as the probable cause. The only circumstances
in which it would be legitimate would be if the highest ranked cause was the one which on all the
evidence the judge was satisfied was the probable cause of the incident or loss in question…I
consider that it is dangerous and generally a fruitless occupation to seek to rank possibilities or
probabilities in percentage terms in any event. If there are five possibilities of which four are remote
or extremely improbable, that conclusion may go to support a judge’s finding that the remaining
“possibility” is in fact the probable cause or explanation for the event in question. Where there
are two competing theories before him neither of which is improbable, that having rejected one it
is logical to accept the other as being the cause on the balance of probabilities. It was accepted
in the course of argument on behalf of the appellant that, as a matter of principle, if there were
only three possible causes of an event, then it was permissible for a judge to approach the matter
by analysing each of those causes. If he ranked those causes in terms of probability and concluded
that one was more probable than the others, then, provided those were the only three possible
causes, he was entitled to conclude that the one he considered most probable, was the probable
cause of the event provided it was not improbable.”

7. The tribunal can still conclude that, although Cause 1 is the most likely one, it is still not proved on a
balance of probabilities; in that case, the causation case was not proved. Lord Porter said in Yorkshire
Dale Steamship Co Ltd v. Minister of War Transport [1941] AC 691 at page 714: “…causation and its
incidence is a thorny subject and each new case opens up new matter for consideration”. One needs to
get away from pure philosophy:

“Those interested in philosophy will find modern philosophic views on causation explained in
Russell’s History of Western Philosophy in the chapter on Hume Book 3 ch. xvii. The common law
is not however concerned with philosophic speculation, but is only concerned with ordinary
everyday life and thoughts and expressions” (Monarch Steamship Co Ltd v. Karlshamns Oljefabrike
[1949] AC 196 at 228)

8. Hume, a 18th Century Scottish philosopher, held that causation related to “an object precedent and
contiguous to another, and so united with it in the imagination, that the idea of the one determines the
mind to form the idea of the other, and the impression of the one to form a more lively idea of the other”
(Hume A Treatise of Human Nature). This would not do at law. I drop a small stone in the Caribbean; this
does cause ripples but not the tidal wave that floods the Maldives the following day.

9. A tribunal can, by excluding the more improbable explanations, “firm up” on what it consequently considers
is the probable explanation. In Ide v. ATB Sales [2008] EWCA Civ 424 by the Court of Appeal, Thomas
LJ said this:

“As a matter of common sense it will usually be safe for a judge to conclude, where there are two
competing theories before him neither of which is improbable, that having rejected one it is logical
to accept the other as being the cause on the balance of probabilities. It was accepted in the course
of argument on behalf of the appellant that, as a matter of principle, if there were only three possible
causes of an event, then it was permissible for a judge to approach the matter by analysing each
of those causes. If he ranked those causes in terms of probability and concluded that one was more
probable than the others, then, provided those were the only three possible causes, he was entitled
to conclude that the one he considered most probable, was the probable cause of the event provided
it was not improbable.”

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10. Tribunals should be careful of adopting what is sometimes called the “but for” approach to causation. I
may be hit by your car and, but for your car being in the road, I would not have been hit when I tripped
over my shoelace and fell in front of your car. This does not mean that you have caused my injury. The
example in the Banque Bruxelles case [1997] AC 191 of the negligent doctor is a good illustration:

“A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He
goes to a doctor who negligently…pronounces his knee fit. The climber goes on the expedition,
which he would not have undertaken if the doctor had told him the true state of his knee. He suffers
an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do
with his knee”.

11. The courts have said that causation is all a matter of common sense (Galoo v. Bright Grahame Murray
[1994] 1 WLR 1360, 1375A). The problem in contested cases arises when each party’s common sense
answer to the causation issues differs; the judge’s perception of what the common sense answer may differ
from the parties’. Thus, common sense in simple terms can produce different answers and is or can be a
simplistic approach.

12. The doctrine of “res ipsa loquitur” (or “the thing speaks for itself”) is much discussed but rarely applied.
There will be some cases where it is not possible directly to prove what the cause of damage was but, if
there really is no other explanation other than one which leaves a defendant liable, it will be applied.
However, if there are two or more rational explanations which cannot be discounted, it will not be possible
to apply the doctrine.

21. One can conclude therefore that proof on a balance of probabilities will involve weighing up the evidence
on any given topic and deciding whether what has been asserted by the party (with the burden of proof)
was said or done has occurred. Causation is broadly a matter of common sense and one should not be
diverted by an analysis based on chances and possibilities to produce some theoretical probability.
Sherlock Holmes is alive in our memory and on our bookshelves but has only a small part to play in a
civil court’s process.

22. It is in connection with unplanned delay and loss and expense or cost that many construction projects
which go wrong are concerned with. The delay will be clear – X weeks later than the originally agreed
date – the difficulty is to prove or disprove that delay was caused by factors for which the other party was
responsible or at least at risk for. Cost or loss can often be proved, although it is often difficult to establish
and contractors are not keen often to disclose what their true overall loss is, compared with their tendered
prices and rates. It is often difficult to relate pats of the real loss or cost to the events in question that are
said to give rise to the events which justify the particular claim. Contractors who have not been able to
keep effective records about delays or the attribution of extra cost often resort to the global or total cost
claim; the job has cost me more than my contract price – the costs overrun must relate to the things about
which I am complaining because I cannot think of anything else which caused or contributed to it.

23. Tribunals, doing their job properly, will not assume that there must be a link between delay and loss or
cost and the events relied on. They must be proved but only on the balance of probabilities. Consultants
advising either side need to remember that. Whilst employers facing claims do not technically have to
disprove or prove positively that the delays were or costs caused by factors other than what the contractor
is complaining about, it will help them if they are in a position to do so – just saying “Prove it” may work
for an (alleged) criminal but without more often does not work for employers.

24. If we consider first delay, how can a court or arbitrators be satisfied on a balance of probabilities that
delay has or has not been caused by the events complained of by the Contractor? The first step is to
determine what is or has become the critical path, that is, what activity at any one time is dictating
whether the Works will be finished on time. In a simple job, say a one storey one room building, it is
easy – clear site – excavate and then concrete foundations – brick walls – floor slab – roof trusses – roof

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tiling – electrics – windows and doors – paint – hand over keys to delighted owner. If the project is due
to start on Day 1 with the site clearance and it does not start because the builder is delayed on another
project, one probably has critical delay which is down to the contractor. If having built the walls, the
architect calls for a different type of roofing, which takes two weeks longer to procure than the originally
specified roofing, that may delay the project by two weeks and will be down to the employer. Multi storey
buildings and major power stations involve very much more complex interactions between the different
activities but logic must play a part.

25. To prove delay, one needs to know (1) how the project was programmed, (2) whether the programming
was sensible, logical and achievable, (3) what (probably) happened on the project and (4) what events
probably occurred which can be shown to have impacted on progress at given stages. Overall, what judges
and arbitrators are trying to do is to apply logic to work out against actual and programmed progress what
actually caused overall or critical delay.

26. This logic needs to be applied to the very complex building or engineering installations. A power station
project, which includes for the design, provision and installation not only of the building and the turbines
but also the electrical transmission lines to the relevant National Grid, may give rise to complexities in
determining where the critical path lies at any one time. It may be that there are major delays in the land
procurement for, and the construction of, the transmission cable pylons (there often are and they often
can be put down to the employer’s default in failing to provide appropriate possessions) but what is truly
delaying the project is the development of the design of the turbines which can achieve the specified
contractual requirements. So, nothing might be going on at the power station site itself but that may be
because it is not necessary to do so until the design and development of the turbines has reached a certain
level of completeness. The contractor may have perfectly good financial claims in respect of the localised
delay and more importantly the disruption and extra cost of and occasioned by insufficient land possession
being provided by the employer for the pylons but it might have greater difficulty in establishing that
there is critical delay.

27. The Courts have adopted a test for causation when it comes to delay (and indeed other things) and this is
sometimes referred to as the “dominant cause” test. Another way of putting it is: what is the real cause
of delay at any given time? That is when logic kicks in.

28. A working example is the case of Walter Lilly v. Mackay [2012] EWHC 1773 (TCC) which involved a
building contract of a smart house in Central London for a rich man and his wife. The project was seriously
delayed. When addressing the issues, the judge first looked at the overall history and then analysed all
the individual events said to have caused delay, both for and against the Contractor.

“362. It is first necessary to consider what the Contract between the parties requires in relation
to the fixing of an appropriate extension of time. Whilst the Architect prior to the actual Practical
Completion can grant a prospective extension of time, which is effectively a best assessment of
what the likely future delay will be as a result of the Relevant Events in question, a court or arbitrator
has the advantage when reviewing what extensions were due of knowing what actually happened.
The Court or arbitrator must decide on a balance of probabilities what delay has actually been
caused by such Relevant Events as have been found to exist; that is by analogy to the exercise that
the Architect has to do within 12 weeks of Practical Completion under Clause 25.3.3. How the
court or arbitrator makes that decision must be based on the evidence, both actual and expert.

363. Clause 25.3.1, which deals with extensions of time being granted prior to Practical Completion,
clearly envisages that the extension must relate to the extent to which “completion of the Works is
likely to be delayed” by the Relevant Event or Events. The extension to be granted within 12 weeks
after the date of Practical Completion (Clause 25.3.3) is to involve the fixing of a Completion Date
which is “ fair and reasonable having regard to any of the Relevant Events”. Reading the two sub-
clauses in context and together, they essentially mean the same thing. If at the latest stage it is

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clear that the Relevant Event in question has actually delayed the Works by, say, 10 weeks, it would
be an extraordinary state of affairs if the extension of time then granted as fair and reasonable
was anything other than 10 weeks.

364. In Balfour Beatty Building Ltd v. Chestermount Properties Ltd (2003) 62 BLR 1, Mr Justice
Colman had to address several issues (under a JCT contract in similar form to the Contract here)
one of which was whether in granting an extension of time the Architect should grant as an extension
only the number of days delay actually caused by the Relevant Event. The argument was run that,
if towards the end of a period of culpable delay a variation order is issued which delays completion,
the Contractor was entitled not simply to an extension for the period of delay actually caused by
the variation but (by reason of its timing) to a full extension up until the time that the variation
was executed. The learned judge said that the “net” method was correct. He said at Page 34:

“Fundamental to this exercise is an assessment of whether the relevant event occurring

during a period of culpable delay has caused delay to the completion of the Works and, if
so, how much delay.”

This is consistent with the wording of Clause 25 in this case.

365. In the context of this contractual based approach to extension, one cannot therefore do a
purely retrospective exercise. What one cannot do is to identify the last of a number of events
which delayed completion and then say it was that last event at the end which caused the overall
delay to the Works. One needs to consider what critically delayed the Works as they went along.
For instance in this case, it would be wrong to say that the problem with the Courtyard Sliding
Doors delayed the Works until it emerged as a problem in April 2008. Put another way, it did not
delay the Works (if at all) until it emerged as a problem which needed to be addressed.

366. There has been a substantial debate between the parties as to how what is called concurrent
(or sometimes concurrent and co-effective) causes of delay should be dealt with. This debate is
only germane where at least one of the causes of delay is a Relevant Event and the other is not. It
relates to where a period of delay is found to have been caused by two factors. Of course, the
debate will depend upon the contractual terms in question but most of the debate in cases in this
country and elsewhere has revolved around extension of time clauses similar to those contained
in Clause 25 where the Architect has to grant an extension which is “ fair and reasonable”. The
two schools of thought, which currently might be described as the English and the Scottish schools,
are the English approach that the Contractor is entitled to a full extension of time for the delay
caused by the two or more events (provided that one of them is a Relevant Event) and the Scottish
approach which is that the Contractor only gets a reasonably apportioned part of the concurrently
caused delay. The Scottish Approach is highlighted in the Inner House case of City Inn Ltd v.
Shepherd Construction Ltd [2010] BLR 473.

367. In Henry Boot Construction (UK) Ltd v. Malmaison Hotel (Manchester) Ltd (1999) 70 Con
LR 32, Mr Justice Dyson had to decide primarily whether an arbitrator had jurisdiction to deal
with a defence by an employer that events such as variations and late information had not delayed
the contractor but that other matters were causes of the delay. At Paragraph 13, he referred to
some common ground between the parties:

“Second, it is agreed that if there are two concurrent causes of delay, one of which is a
relevant event, and the other is not, then the contractor is entitled to an extension of time
for the period of delay caused by the relevant event notwithstanding the concurrent effect
of the other event. Thus, to take a simple example, if no work is possible on a site for a week
not only because of the exceptionally inclement weather (a relevant event), and if the failure
to work during that week is likely to delay the Works beyond the completion date by one

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week, and then if he considers it fair and reasonable to do so, the architect is required to
grant an extension of time of one week. He cannot refuse to do so on the grounds that the
delay would have occurred in any event by reason of the shortage of labour.”

It could thus be said that the learned judge was simply repeating the common ground between
the parties rather than reach a considered decision on the issue. That said, the judge seems to
have “run with the ball” in his second and third sentences and appears to have endorsed that
common ground.

368. Mr Justice Edwards Stuart said in De Beers v. Atos Origin IT Services UK Ltd [2011] BLR 274:

“177. The general rule in construction and engineering cases is that where there is concurrent
delay to completion caused by matters for which both employer and contractor are responsible,
the contractor is entitled to an extension of time but he cannot recover in respect of the loss
caused by the delay. In the case of the former, this is because the rule where delay is caused
by the employer is that not only must the contractor complete within a reasonable time but
also the contractor must have a reasonable time within which to complete. It therefore does
not matter if the contractor would have been unable to complete by the contractual completion
date if there had been no breaches of contract by the employer (or other events which entitled
the contractor to an extension of time), because he is entitled to have the time within which
to complete which the contract allows or which the employer’s conduct has made reasonably
necessary.”

369. In a shipbuilding contract dispute in Adyard Abu Dhabi v. SD Marine Services [2011] EWHC
848 Comm, Mr Justice Hamblen quoted as good law what Mr Justice Dyson said at Paragraph 13
in the Henry Boot case (above):

“277. It is to be noted that this example involves a relevant event which caused a period of
actual delay to the progress of the works – no work could be done for a week due to the
weather. If that is established then the contractor is entitled to his extension of time even if
there is another concurrent cause of that same delay. A useful working definition of concurrent
delay in this context is “a period of project overrun which is caused by two or more effective
causes of delay which are of approximately equal causative potency” – see the article
Concurrent Delay by John Marrin QC (2002) 18 Const LJ No. 6 436.

370. In any event, I am clearly of the view that, where there is an extension of time clause such as
that agreed upon in this case and where delay is caused by two or more effective causes, one of
which entitles the Contractor to an extension of time as being a Relevant Event, the Contractor is
entitled to a full extension of time. Part of the logic of this is that many of the Relevant Events
would otherwise amount to acts of prevention and that it would be wrong in principle to construe
Clause 25 on the basis that the Contractor should be denied a full extension of time in those
circumstances. More importantly however, there is a straight contractual interpretation of Clause
25 which points very strongly in favour of the view that, provided that the Relevant Events can be
shown to have delayed the Works, the Contractor is entitled to an extension of time for the whole
period of delay caused by the Relevant Events in question. There is nothing in the wording of Clause
25 which expressly suggests that there is any sort of proviso to the effect that an extension should
be reduced if the causation criterion is established. The fact that the Architect has to award a “ fair
and reasonable” extension does not imply that there should be some apportionment in the case of
concurrent delays. The test is primarily a causation one. It therefore follows that, although of
persuasive weight, the City Inn case is inapplicable within this jurisdiction.”

29. One of the problems for the experts and the Court in the Walter Lilly case was the fact that there was no
usable programme for the period after the agreed and admitted extension of time. Therefore, the Court

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could not do the conventional exercise by direct comparison against any effective critical path programme.
What was important however for the Court was the need to adopt an objective approach, unlike the
approach of one of the delay experts which contained significant subjective views on what might be
causing overall delay. For instance, that expert considered that he could discount what might otherwise
be critical delays if the work to which the delays attached was being considered for omission by the
Employer (even though these works were never omitted):

“375…This was wholly illogical. If both parties were aware that the client was considering
omitting an item of work (and as a result the Contractor did nothing on the item of work) and
then it was omitted, then that may or may not cause delay depending on whether other items of
work were dependent upon the omitted item of work being done. If only the client was aware
that it might omit the item, whether it was eventually omitted or not, delay could still be caused
if the Contractor’s progress was delayed. If the item is never omitted and the Contractor has
to carry it out, the Contractor may still be delayed not only by the need to execute such work
but also by the delayed decision as to whether the work should go ahead or not. The reality
check should generally be to consider whether or not the actual item of work which is said to
cause delay was actually omitted or not.”

30. What the successful Contractor’s delay expert did was “to analyse on a month by month basis (broadly)…
what was in reality impacting upon progress. What he sought to do was to identify as far as possible
WLC’s actual progress with the Works on a monthly basis and its planned intentions for executing the
remainder of the Works”. He had regarded to:

“378… the likely longest sequence of the outstanding work on a monthly basis as being the primary
pointer to what was delaying the work at any one time. This was a wholly logical approach and,
indeed is the approach used by most delay experts when there is a usable baseline programme
from which to work. The logic is simply that if there are, say, two outstanding items of work, A and
B, and A is always going to take 20 weeks to complete but B is only going to take 10 weeks, it is A
which is delaying the work because B is going to finish earlier; overall completion is therefore
dictated by the length of time needed for A. Put another way, it does not matter if B takes 19 weeks,
it will be the completion of A which has prevented completion. Thus, if one is seeking to ascertain
what is delaying a contractor at any one time, one should generally have regard to the item of work
with the longest sequence. There was some sterile debate about whether Mr Robinson was adopting
a purely “prospective” approach when he made it clear that “as a reality check” he had regard
to what actually happened. There is in my view nothing wrong with such a “reality check”. An
example might be that, say in February 2007 WLC was saying albeit in good faith that an item of
work would take 25 weeks from then onwards. If in reality it only took two weeks, one would need
to have regard to the efficacy of the earlier statement that it would take longer. Therefore it is
necessary to have regard to how long individual items actually took to perform and not just have
regard to what one party or the other at the time was saying it would take.”

31. However, one must not confuse this exercise with any determination as to what work was actually being
finished in the days or weeks leading up to Practical Completion. For instance, the final work is often the
removal of the site huts and the final clean of the buildings: there may be for instance no variation which
has directly or actually delayed those works and what one needs to determine is why those very final
operations could not practically have been done earlier than they in fact were.

32. There was also a relatively sterile debate about whether a “prospective” or “retrospective” basis of
assessment should be used. It is usually accepted that, whichever basis one adopts, the same result at least
in theory should be produced. If there is a usable programme, most experts tend to adopt the prospective
approach, albeit in the light of the actual events. Indeed, the programme can be computer-generated and,
if one feeds in to the computer programme accurately the events which have happened, the programme
will generate in effect the answer. However, one of the problems for the court or the arbitrators is that,

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once they have heard the evidence and the argument, they cannot, properly, “manipulate” the computer
programme to produce the answer, because otherwise they will not have given the parties the opportunity
to be heard on the permutation of facts which they find. The result is that almost all tribunals tend to
analyse the events which happened on a time slice basis, which is often monthly but can be quarterly. So
one tip is that one should not assume that the computer programme used by the expert actually proves
the case on delay – it illustrates the delay case.

33. The Court was reluctant to attach any significant weight to the subjective views of individuals at the time
as to what was delaying the project. For instance the views both contemporaneous and retrospective of
the individual defendants were relatively worthless because their views were not based on any objective
analysis. Similar considerations applied to various consultants such as the architects who were not called
as witnesses by either side.

34. Moving on to cost, loss and expense or damages, there are some particular problems relating to construction
projects and this often stems from the fact that more often than the Contractor’s records, whatever they
do record, do not record what is necessary on their won to prove the particular case. Of course you cannot
make a “silk purse out of a sow’s ear” and therefore even good records cannot make essentially a bad
claim good. A problem with delay related claims on technically complex projects is that supervisors can
be unaware of what is the real cause of any disruption at the time – they may know that materials are
coming in later than planned or that the sub-contractor does not have the promised number of workers
on the site or that instructions are needed from someone else but they do not necessarily relate these
typical problems to something that can or will be claimed from someone else. There are always three
possibilities about responsibility for the event causing disruption or delay: it is the risk (or fault) of the
Employer, the Contractor or a sub-contractor or supplier. There is thus a 2 out of 3 chance that it is someone
else’s risk. There is thus a good reason for the Contractor to keep good records.

35. Good records record not only what workers are doing what where on any given day and for how long but
also what time is wasted and for what reason every day. Good records allocate time to different activities
each day – it is no good simply recording that Fred, Jim and Tommy were working in Area A on the first
floor or that 15 steelworkers were on site that day. Accurate allocations provide real data for instance as
to how much time was spent on a variation and over how many days which can be used not only for being
paid properly for the actual variation but also establish precisely when the work was done for use in a
delay analysis.

36. Good records also help to prove or disprove disruption. One of the ways to help establish disruption is
what some call the “measured mile” approach, for example, if you can show that with reasonable productivity
one plasterer can plaster at the rate of 8m² per hour but that it took 10 hours to do only 40m² on a given
day that tells a story that either he was not a good plasterer or that something was disrupting his performance.
If the records record that the Employer’s representative told the plasterer to stop whilst he checked whether
the plasterer was working to the right specification and that took 5 hours there is the evidence for the
cause of that disruption and the cost – 5 hours @ the plasterer’s rate.

37. Disruption and resource thickening are the most difficult areas of delay related loss to prove. It is pointless
for a contractor simply to claim $X without more as its best assessment of the disruption loss. If the records
are not good enough, that is not the end of the issue because a contractor can legitimately claim on an
assessment basis but it must be evidence based. An example might be extra supervision provided – where,
say, a supervisor has been asked to stay on a delayed project, part time, whilst also working in another
project. Good records would of course show precisely when he or she was present on the delayed project
but, if they do not, a witness might be able to say that the supervisor worked 50% of his/her time during
the relevant period and reference to actual records such as meeting minutes show that he/she attended
meetings 4 times a month – that all helps establish actual deployment to the project and a basis for claiming
50% of the salary cost.

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Sir Robert Akenhead

38. Records also enable contractors to comply with notice provisions such as loss and expense clauses
such as:

“26.1.2 the Contractor shall in support of his application submit to the Architect such information
as should reasonably enable the Architect to form an opinion as aforesaid; and

26.1.3 the Contractor shall submit to the Architect or to the Quantity Surveyor such details of such
loss and/or expense as are reasonably necessary for such ascertainment as aforesaid.”

As the Walter Lilly case established, this does not mean that necessarily the Contractor must submit all
details at the time but only such as are necessary and it does not mean that the Contractor gets nothing
if it does not provide details of all costs incurred, although it might get nothing in relation to particular
cost heads which are unsupported by records. It needs to be appreciated that ultimately losses on claims
will need only to be proved on a balance of probabilities in arbitration or in court and there is no entitlement
to withhold payment because the claimed sums are not proved beyond doubt. I have heard architects say
that the use of the term “ascertainment” in some claim clauses means that the standard of proof is certainty,
not probability; that is wrong and the wording would have to be much stronger to achieve that standard.

39. I turn to the thorny topic of global or total costs claims. These go both to delay and costs. They can be
tricky and, unless rationalised and supported by some reasonable evidence, can be simply and unchallengeably
dismissed by judges and arbitrators. In John Sisk & Sons v. Carmel Building Services [2016] EWHC
806 (TCC) Mrs Justice Carr decided that an arbitrator’s rejection of a total cost claim was wholly justified;
he had held that sufficient doubt had been established by Carmel “as to the accuracy of the ‘total costs’
alleged to have been incurred by [Sisk] to justify the rejection of the claim advanced on that basis”. The
judge said that no flawed legal principle was to be found in the arbitrator’s findings that Sisk’s primary
claim was not a global claim and that a party endeavouring to prove a global or total costs claim will
carry a greater burden than a party endeavouring to prove the same claim on an itemised basis. The
arbitrator was simply reflecting the judgment in Walter Lilly.

40. There has been a lot of authority over the years as to the recoverability of “global loss” (total cost less
recovery) claims. There has been unnecessary confusion between authorities which address the particularity
with which the pleadings should be drafted so that the opposition can know what case is being made
against it and those which suggests that a total cost less recovery might be recoverable. What courts and
arbitrators must do, where they are satisfied on the balance of probabilities that more than insignificant
or nominal cost or loss has been incurred as a result of events which entitle the Contractor to reimbursement,
is to do the best that they can in assessing an appropriate sum. In many cases increasingly these days that
assessment can be precise and made by reference simply to the cost and loss records. Paragraph 468 of
the Walter Lilly judgment drew the various threads together:

“(a) Ultimately, claims by contractors for delay or disruption related loss and expense must be
proved as a matter of fact. Thus, the Contractor has to demonstrate on a balance of probabilities
that, first, events occurred which entitle it to loss and expense, secondly, that those events caused
delay and/or disruption and thirdly that such delay or disruption caused it to incur loss and/or
expense (or loss and damage as the case may be). I do not accept that, as a matter of principle, it
has to be shown by a claimant contractor that it is impossible to plead and prove cause and effect
in the normal way or that such impossibility is not the fault of the party seeking to advance the
global claim. One needs to see of course what the contractual clause relied upon says to see if
there are contractual restrictions on global cost or loss claims. Absent and subject to such
restrictions, the claimant contractor simply has to prove its case on a balance of probabilities.

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(b) Clause 26 in this case lays down conditions precedent which, if not complied with, will bar to
that extent claims under that clause. If and to the extent that those conditions are satisfied, there
is nothing in Clause 26 which states that the direct loss and/or expense cannot be ascertained by
appropriate assessments.

(c) It is open to contractors to prove these three elements with whatever evidence will satisfy the
tribunal and the requisite standard of proof. There is no set way for contractors to prove these
three elements. For instance, such a claim may be supported or even established by admission
evidence or by detailed factual evidence which precisely links reimbursable events with individual
days or weeks of delay or with individual instances of disruption and which then demonstrates
with precision to the nearest penny what that delay or disruption actually cost.

(d) There is nothing in principle “wrong” with a “total” or “global” cost claim. However, there
are added evidential difficulties (in many but not necessarily all cases) which a claimant contractor
has to overcome. It will generally have to establish (on a balance of probabilities) that the loss
which it has incurred (namely the difference between what it has cost the contractor and what it
has been paid) would not have been incurred in any event. Thus, it will need to demonstrate that
its accepted tender was sufficiently well priced that it would have made some net return. It will
need to demonstrate in effect that there are no other matters which actually occurred (other than
those relied upon in its pleaded case and which it has proved are likely to have caused the loss).
It is wrong, as Counsel suggested, that the burden of proof in some way transfers to the defending
party. It is of course open to that defending party to raise issues or adduce evidence that suggest
or even show that the accepted tender was so low that the loss would have always occurred
irrespective of the events relied upon by the claimant contractor or that other events (which are
not relied upon by the claimant as causing or contributing to the loss or which are the “ fault” or
“risk” of the claimant contractor) occurred may have caused or did cause all or part of the loss.

(e) The fact that one or a series of events or factors (unpleaded or which are the risk or fault of the
claimant contractor) caused or contributed (or cannot be proved not to have caused or contributed)
to the total or global loss does not necessarily mean that the claimant contractor can recover nothing.
It depends on what the impact of those events or factors is. An example would be where, say, a
contractor’s global loss is £1 million and it can prove that but for one overlooked and unpriced
£50,000 item in its accepted tender it would probably have made a net return; the global loss claim
does not fail simply because the tender was underpriced by £50,000; the consequence would simply
be that the global loss is reduced by £50,000 because the claimant contractor has not been able to
prove that £50,000 of the global loss would not have been incurred in any event. Similarly, taking
the same example but there being events during the course of the contract which are the fault or
risk of the claimant contractor which caused or cannot be demonstrated not to cause some loss, the
overall claim will not be rejected save to the extent that those events caused some loss. An example
might be (as in this case) time spent by WLC’s management in dealing with some of the lift problems
(in particular the over-cladding); assuming that this time can be quantified either precisely or at
least by way of assessment, that amount would be deducted from the global loss. This is not inconsistent
with the judge’s reasoning in the Merton case that “a rolled up award can only be made in the case
where the loss or expense attributable to each head of claim cannot in reality be separated”, because,
where the tribunal can take out of the “rolled up award” or “total” or “global” loss elements for
which the contractor cannot recover loss in the proceedings, it will generally be left with the loss
attributable to the events which the contractor is entitled to recover loss.

(f) Obviously, there is no need for the Court to go down the global or total cost route if the actual
cost attributable to individual loss causing events can be readily or practicably determined. I do
not consider that Vinelott J was saying in the Merton case (at page 102 last paragraph) that a
contractor should be debarred from pursuing what he called a “rolled up award” if it could

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Sir Robert Akenhead

otherwise seek to prove its loss in another way. It may be that the tribunal will be more sceptical
about the global cost claim if the direct linkage approach is readily available but is not deployed.
That does not mean that the global cost claim should be rejected out of hand.

(g) DMW’s Counsel’s argument that a global award should not be allowed where the contractor
has himself created the impossibility of disentanglement (relying on Merton per Vinelott J at 102,
penultimate paragraph and John Holland per Byrne J at page 85) is not on analysis supported by
those authorities and is wrong. Vinelott J was referring to unreasonable delay by the contractor
in making its loss and/or expense claim; that delay would have led to their being non-compliance
with the condition precedent but all that he was saying otherwise was that, if such delay created
difficulty, the claim may not be allowed. He certainly was not saying that a global cost claim would
be barred necessarily or at all if there was such delay. Byrne J relied on Vinelott J’s observations
and he was not saying that a global cost claim would be barred but simply that such a claim “has
been held to be permissible in the case where it is impractical to disentangle that part of the loss
which is attributable to each head of claim, and this situation has not been brought about by delay
or other conduct of the claimant”. In principle, unless the contract dictates that a global cost claim
is not permissible if certain hurdles are not overcome, such a claim may be permissible on the facts
and subject to proof.”

41. The ascertainment done by the court or by arbitrators will often be on at least partially an assessment
basis. Thus, for example, it may be necessary to allow only a proportion of a contract manager’s time
because he/she may be working partly on another project and records have not been kept down to the
nearest minute as to how much time in any given week was spent on one project or the other. An assessment
of say 40% or 75% may be the best that the tribunal can do but that is a legitimate exercise. One needs
to distinguish between a rational basis for assessment and simply a guess.

42. In relation to sub-contractors’ related claims, it is best if evidence can be provided by relevant sub-
contractor witnesses which explains cause and effect in relation to delays suffered by them and justifies
and proves financially the claims. This is not absolutely essential. For instance, if the Contractor has
settled with the sub-contractor in question, the settlement sum can be the basis of recovery provided that
it was reasonable in all the circumstances and the claim settled can be linked factually to what is being
claimed by the Contractor.

43. Head office overheads and profit claims feature in most delay claims. There can be little doubt now that
in principle such losses are claimable but, of course, they must be proved. The different formulae, such
as the Hudson or Emden formulae, can only provide a mathematical basis but they need to be supported
in effect by evidence that the Contractor would have been able to secure other work and that it has not
recovered, for instance through variations, some of the loss identified by the application of the relevant
formula. At paragraph 543 of the Walter Lilly judgment, these conclusions were drawn:

“(a) A contractor can recover head office overheads and profit lost as a result of delay on a
construction project caused by factors which entitle it to loss and expense.

(b) It is necessary for the contractor to prove on a balance of probabilities that if the delay had
not occurred it would have secured work or projects which would have produced a return (over
and above costs) representing a profit and/or a contribution to head office overheads.

(c) The use of a formula, such as Emden or Hudson, is a legitimate and indeed helpful way of
ascertaining, on a balance of probabilities, what that return can be calculated to be.

(d) The “ascertainment” process under Clause 26 does not mean that the Architect/Quantity
Surveyor or indeed the ultimate dispute resolution tribunal must be certain (that is sure beyond
reasonable doubt) that the overheads and profit have been lost. HHJ Lloyd QC was not saying that

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assessment could not be part of the ascertainment process. What one has to do is to be able to be
confident that the loss or expense being allowed had actually been incurred as a result of the Clause
26 delay or disruption causing factors.”

C. Technology as an aid to proof or disproof

44. A word of warning about technology: until we have robots who think better than humans, computers are
only as good as what is put into them.

45. Payroll and cost software can be vital elements in proof. I was involved in cases in which a claiming
contractor would not provide its payroll information but wanted to claim for salary related costs at so
much per hour/day/week/month. There should be no surprise that tribunals reject such claims or mark
them down as low as the opposing expert evidence accepts.

D. Witnesses

46. There can be problems with witnesses. Whilst they are still employees, there is an incentive for and some
contractual control over them to make themselves available to give evidence. If they leave, and there is
a fair turnover of staff on international projects, then there can be little or no incentive on them to return
to help out its former employer. Two tips are: write into the employment contracts terms that they will
continue to assist in any dispute resolution process after they leave (perhaps on a reasonable remuneration
basis) and secondly take a statement from them before they leave about matters which you believe that
are likely to go to litigation or arbitration.

E. Documents

47. With ever increasing computerisation, much more is recorded technologically. It is sadly necessary to
keep records for some time. It is amazing how often companies find that they have not effectively retained
records, in particular email records. So much is set out in e-mails these days that if the-mail records are
not retained in some searchable form tribunals can hold that against parties at least in the sense that there
is nothing by way of email to challenge key assertion made by the other party.

48. If you read the e-mails which were being sent in particular in the Walter Lilly case such as those set out
in the judgment from Mr Mackay to various consultants and the Contractor, you would realise that it is
a potentially dangerous medium and it can come back to bite you. Some of those e-mails contained swear
words which it would cause even a hardened audience to blush. One was from Mr Mackay to the Contractor’s
project director:

“Oh no, little guy like you – throws his weight around – big chip on your shoulder – you were
definitely bullied at school!!!!

…or is it the fact that your little victorian 1800 sq ft cottage in pulborough can fit into my dining
room…Or perhaps the fact when you bought it in 2003 the cost was the same as my defective veneer.
I’ll bet you will lord it in the pub over those neighbours of yours in the cheap semi’s.

What is it that makes you so chippy little man.

Well whatever it is you’re costing your company of fortune. I reckon around £1.5 million so far.
Sent a note to your bosses last night saying your way isn’t working and asking when they might
fire you….”

49. It is emails such as this that can lead to a tribunal forming possibly adverse views about key witnesses.

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Sir Robert Akenhead

F. Experts

50. Experts of different disciplines will often be needed. In some major and wide ranging cases 5 or more
experts per side are not uncommon.

51. It is sensible to select experts with care. In any case, but in substantial cases, it is not worth engaging the
cheapest expert unless he or she is the best qualified that can be found.

52. Judges and arbitrators have to weigh up the competing views of experts from opposing parties. That can
be difficult if each is convincing and well qualified. However, cases from the TCC in London provide
some insight on the sorts of attributes which they find more or less convincing.

53. In National Museums on Merseyside v. AEW Architects and Designers [2013] EWHC 2403 (TCC),
a professional negligence case, the judge said this:

“36. I now turn to consider the experts’ evidence. The Museum’s architect expert was Mr J who
is an extremely experienced architect and indeed expert. He produced by far the best expert
report of all the architect experts. When giving evidence he came over as extremely thoughtful,
serious and knowledgeable. He was able to explain himself in language non-architects could
understand. He had carefully analysed all the issues and gave the most comprehensive and
credible evidence about not only the technicalities but also responsibility and the need or
desirability for remedial works.

37. In contrast, Mr P, the architect expert called by AEW was, although honest, almost wholly
unimpressive, possibly partly because he had never given expert evidence before. He had the
advantage of being called simultaneously with Mr W, AEW’s engineering expert but, in spite of the
encouragement, if not prompting, provided by Mr W sitting beside him, it was clear that he had
given little or no coherent thought to the issues in the case. I was surprised (to say the least) to be
told by Mr W that he and Mr P (who both work for the same firm) had not been asked to consider
what could reasonably be expected of architects in AEW’s position. This extraordinary state of
affairs (in a case all about alleged professional negligence on the part of architects) may explain
why such little coherent thought had been given by Mr P to this aspect of the case. Mr P was wholly
unconvincing about all aspects of liability. He made a concession under cross-examination which
one would simply never expect a competent expert who was aware of his duties to the court to
make; he accepted that he was “seeking to defend the indefensible for the benefit of AEW” (Day
7 Transcript Day lines 12 to 16). He was faltering in his evidence and often did not seem to understand
the questions (which were never unclear or over-sophisticated). I can place no weight on any of
his evidence, save where another expert may have agreed.

38. Mr F was the architect expert called by the Contractor. He was reasonably experienced, albeit
not as experienced as Mr J. He was a decent expert who gave his evidence in a positive way. His
evidence was primarily limited to the steps, seats and terraces issues. However, he also changed
his position at a relatively late stage to agree with a number of remedial steps which were likely
to be required, which hitherto he had disavowed or not positively supported.

39. I have no doubt in preferring the expert evidence of Mr J certainly over Mr P and, save where
he was in agreement with Mr J, Mr F. It was a matter of some interest that the defending parties’
experts moved a not insignificant way towards Mr J’s views on the scope of remedial work as the
trial moved forward. That tends to confirm that he was the more reliable and, at bottom, the most
reliable expert in the case.

40. Moving on to the engineer experts, Mr T for the Museum was the most experienced engineer
and expert of the three who were called. He was absolutely straightforward in the giving of his

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evidence and he was authoritative. I was very impressed with him as I formed the strong view that
he was the most pragmatic of the three engineer experts.

41. Mr W was also experienced having worked as a consulting engineer for 35 years after nine
years working for a contractor. He is an experienced expert. I felt that he was often argumentative
if not combative (albeit polite) when cross-examined. It was clear that he was too willing and too
quick to try to explain away or qualify answers given by Mr P, sitting beside him; it was almost
as if he was trying to protect his fellow employee when Mr P apparently made concessions against
AEW’s interests. I wrote down in my notebook towards the end of his evidence that he had adopted
a “firefighting” approach to seek to circumvent or soften what Mr P had said. Certainly I would
not describe him as partisan but this behaviour in the witness box inevitably has coloured my views
about his reliability in this case. He was unimpressive in his views about quantum issues and some
aspects of the remedial works and was obliged as the trial went on, even up to the 11th hour of the
conclusion of the evidence, to concede that a number of the remedial steps put forward by Mr J
were right. An example of this was the belated acceptance by him on Day 7 of the trial that all of
the remaining steps and seats left in place would have to be removed to be inspected and possibly
replaced. He appeared to be unsure of himself in relation to some aspects concerning the liability
of AEW in relation to the geometry of the steps, seats and terraces. I formed the view that he tended
to oversimplify what had proved historically to all concerned to be intractable and almost insoluble
problems with the geometry of the steps and seats.

42. Dr R was the engineer expert called by the Contractor and, although sufficiently experienced,
he was the least experienced of the three. He is however eminent, having served for instance as
President of the Institution of Structural Engineers. He was decent and straightforward although
he was chatty and occasionally somewhat argumentative. I felt that his approach to the practicalities
involved with the design was somewhat academic, for instance when he suggested that it would be
feasible to use heaters to keep the steps free of ice or using propylene glycol (used on airport
runways and very expensive) to do the same job. He also accepted belatedly that some of the
remedial steps called for by Mr J were necessary which tended to undermine his reliability on this
aspect of the case.”

54. In Cleveland Bridge v. Severfield Rowen [2012] EWHC 3652 (TCC), the judge reviewed the delay and
quantum experts:

“9. So far as the experts are concerned, Mr B, the planning and programming expert for SRS was
very impressive: he is extremely experienced in this field. He was sensible, reasoned, clear, logical
and made concessions as appropriate. However, I found that Mr H, his opposite number for CBUK,
was inexperienced at least as an expert, his first report was confusing and he was nervous and
confused although he tried to be open, even when faced with a slightly aggressive albeit polite
cross-examination. I felt that he went back on things which he had agreed in the Joint Statements
with Mr B, such as the appropriate basis to carry out programme and delay analysis. He carried
out no real analysis of why or how CBUK was delayed in its performance, judged against either
the June or December programmes; he simply albeit enthusiastically asserted that late information,
variations and late release of free issue materials delayed CBUK but did so without any analysis
of the facts at all. I have no difficulty in preferring the thrust of Mr B’s evidence, albeit that, as
will be seen, I do not accept, in logic, all of it.

10. The Quantity Surveyor experts, Mr D and Mr G for CBUK and SRS respectively, were very
different characters and gave their evidence in a different way. Mr D was down-to-earth whilst
Mr G was somewhat more cerebral, genial and canny. Both were experienced and helpful to the
Court and, whilst I do not agree with everything which each said, they were both reliable witnesses.”

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Sir Robert Akenhead

CONCLUSION
55. Evidence is almost always the key component in any litigation or arbitration and more often than not the
party which has the best contemporaneous evidence wins. Therefore the following are worthwhile tips
for both Employer, Contractor and sub-contractors to follow:

(i) Keep up to date, good and relevant work, manufacture and cost records.

(ii) Retain such records.

(iii) Be prepared at the time to contradict in writing anything of importance from other parties.

(iv) Retain good independent experts if required on any substantial issues; do this when the problems
emerge; do not go for the cheapest expert unless he or she is the best available.

(v) Maintain contact with key employees who leave the project, “key” in this context being those whose
input on disputes is essential.

(vi) Be careful about your and make sure your employees are careful about their e-mail content, not
with a view to hiding the truth but to ensure that a bad impression about the sender’s character
does not emerge.

Robert Akenhead

© May 2016

The views expressed in this paper are those of the authors alone, and do not necessarily represent the views of the Society of
Construction Law Hong Kong.

The discussion set out above is a general one and should not be relied upon in place of legal advice specific to the facts of any case.
The author accepts no liability for any such reliance.

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SCLHK PAPER #156 05/2016– AKENHEAD