A recent decision of the Scotland Court of Session (John Doyle Construction Limited v. Laing Management (Scotland) Limited (2004)), relying heavily on the position in the Unites States, has re-examined the complexity of proving claims in construction and should result in more equitable outcomes in the event that it is impossible or impracticable to isolate the various causes of damage. In the future, the loss is to be apportioned on the basis of the relative importance of the causative events, in producing the loss.
It has long been recognised that in complex situations, it may be difficult or impossible to accurately evaluate the damage arising from each of a number of interacting causes, but that this difficulty should not prevent recovery from the defendant.
It was also clear that a global claim should not be treated as prima facie bad and that a composite amount might be recovered with respect to the combined effect of a number of causative events for which the Employer was responsible. Moreover, this causative link should be viewed with ‘common sense.’
It is not unusual to see responses to contractors’ claims in which it is stated that the contractor has failed to take account of his own delays. Reliance is placed on such statements, often broad in nature, in order to deny responsibility for the damage claimed.
In such circumstances, is it correct and acceptable for the employer to profit from the situation?
This debate may have been settled, at least in Scotland, by the recent ruling of the Scottish Court of Session on appeal from the first instance decision in the 2002 case of John Doyle Construction Ltd. v. Laing Management (Scotland ) Limited, (2002) BLR 393.
In this case, John Doyle had submitted a claim, part of which related to disruption due to a combination of factors. In an action to have this part of the claim dismissed, Counsel for Laing Management submitted that the relevancy of a global claim depended on two assumptions holding true: that the Claimants were not themselves responsible to any material extent for the increased costs in respect of which the global claim was advanced and that the Defendants were responsible for all of the causal factors that contributed to the increased costs. It was submitted that John Doyle had caused some of the delay and therefore one of the essential factors for the global claim to succeed was absent.
On appeal, Lord Drummond Young set out in detail the reasoning of the Court of Session:
If a global claim is to succeed … the contractor must eliminate from the causes of his loss and expense all matters that are not the responsibility of the employer….
In the second place, the question of causation must be treated by ‘the application of common sense to the logical principles of causation.’ … If an item of loss results from concurrent causes, and one of those causes can be identified as the proximate or dominant cause of the loss, it will be treated as the operative cause, and the person responsible for it will be responsible for the loss.
In the third place, even if it cannot be said that events for which the employer is responsible are the dominant cause of the loss, it may be possible to apportion the loss between the causes for which the employer is responsible and other causes. In such a case, it is obviously necessary that the event or events for which the employer is responsible should be a material cause of the loss.
[W]e are of opinion that apportionment will frequently be possible in such cases, according to the relative importance of the various causative events in producing the loss. Moreover, the alternative to such an approach … would deny him a remedy even if the conduct of the employer or the architect is plainly culpable…. It seems to us that in such cases the contractor should be able to recover for part of his loss and expense, and we are not persuaded that the practical difficulties of carrying out the exercise should prevent him from doing so.
It is clear from these words that the Court of Session foresaw an apportionment of responsibility for the delay and thereafter an evaluation of the contractor’s financial loss based on this apportionment. This being so, there is no reason why the same global approach should not be applied to the evaluation of extensions of time.
Lord Drummond Young went on to state:
“Where disruption to the contractor’s work is involved, matters become more complex. Nevertheless, we are of the opinion that apportionment will frequently be possible in such cases…”
Lord Drummond Young acknowledged that:
“It may be said that such an approach produces a somewhat rough and ready result”
but he went on to state that:
“This procedure does not, however, seem to us to be fundamentally different in nature from that used in relation to contributory negligence or contribution among joint wrongdoers.
However, contractors should not view the decision as a ticket for a free meal! They are still required to set out the events relied on; to isolate as far as possible the consequences of individual events; to eliminate as far as possible the consequences of events that are not the responsibility of the employer; to set out in detail the heads of loss which cannot be accurately allocated to individual events; to set out the general proposition that links between the events and the losses do exist and to aver and establish that it is impossible or highly impracticable to identify the causative links between each event and the consequence thereof.
However, the Court of Session saw fit to reject an application for summary dismissal and to allow it to proceed to trial while indicating that the analysis should take into account the impracticality of proving causation by event on appropriate sub-portions of the claim if not the whole claim.
[The full article was published in The International Construction Law Review, Volume 22, Part 2, April 2005. The Scottish John Doyle case spawned the more famous series of City Inn cases. In England, however, the Technology and Construction Court considered the issue in Walter Lilly & Co Ltd  EWHC 1773 (TCC);  B.L.R. 503 and held that the principle of apportionment of the period of delay and partial EOT ‘probably’ does not reflect the law of England.]