Global Claims

The effect of John Doyle Construction Ltd v Laing

Management (Scotland)/London Underground
Limited v Citylink Telecommunications Limited
Presented to ICES
Date: 15 November 2007
by David Moss, Gregory Buckley and
Claire Rawlinson of Hammonds

WHAT IS A GLOBAL CLAIM

1.1

What is a global claim

Global claims are a modification of the following basic principles of contractual claims,
so far as a tribunal will allow such modification.
Breach/claims event
The claimant has the burden of proving
(a)

that the breach of contract, breach of duty or other claims event has actually
occurred; and

(b)

that the defendant is factually and legally responsible for it.

Causation
The claimant has the burden of proving that the breach/claims event caused the loss
alleged to have been suffered.
Quantum
The claimant has the burden of proving loss suffered and amount of that loss.
A global claim is one where the claimant cannot or will not adduce evidence to prove
these essential elements and offers instead a collection of breaches/events and a
total sum of loss incurred and asserts that the former caused the latter.
Global claims may be defined as those where a global or composite sum,
however computed, is put forward as the measure of damages or of
contractual compensation where there are two or more separate matters of
claim or complaint, and where it is said to be impractical or impossible to
provide a breakdown or sub-division of the sum claimed between those
matters. (Hudson)
In other words claims where the sum put forward as the measure of damages for loss
or expense is said to have been caused by two or more events which have interacted
with each other in very complex ways, so that it becomes extremely difficult, if not
impossible, to identify what loss and expense each event has caused.
A global claim is sometimes referred to as a rolled up, total cost or actual cost
claim.
1.2

Types of global claim

Loss and expense
Usually based on an allegation that there were numerous variations in contract and
the costs overran. The claimant then alleges the cost overrun is recoverable as a
result of the variations. There is, however, no analysis that a particular variation leads
to a particular item of cost.

Delay and disruption

The claim is usually based upon an allegation that there were numerous variations
events interfering with the works and the works were delayed, entitling the contractor
to an extension of time and monies. Again there is no link between the alleged events
and delay.
There are a number of ways in which the global sum may be quantified, but it is
usually done on the basis of the total additional cost said to be the result of the
matters complained of.
1.3

The problem with global claims basic principles of contract claims

Reversed burden of proof
Usually the claimant has the burden of proving breach of contract, that the breach
caused the loss alleged to have been suffered and proving the loss suffered and the
amount of loss. A global claim is one where the claimant cannot or will not adduce
evidence to prove these essential elements and offers instead a collection of
breaches/ events and a total sum of loss incurred and asserts that the former caused
the latter.
Global claims computation by itself is evidence neither of breach or other entitlement,
nor of damage or additional cost. Even if accompanied by separate and convincing
evidence of breaches of contract or other valid grounds of compensation, and even if
strong inference is raised at least some damage or additional costs must have been
caused, the method is not even evidence as to what that additional coats must have
been caused. The method is not even evidence as to what that additional cost is,
since there are many other possible explanations of the cost overrun.
Unfair and prejudicial to defendants
In addition, global claims, whether or not computed from a basis of total cost, are
almost invariably unfair and highly prejudicial to defendants, since they avoid
indicating the precise case to be met and enables the claimant to change course
during the evidence.
No reduction for individual claims
The tribunal has no satisfactory material before it to reduce the overall claim in
respect of disallowed individual claims.

1.4

Brief History of Global Claims

Under English Law early cases provided that a global claim could in principle be
made.
London Borough of Merton v Stanley Hugh Leach [1985] 32 BLR 31:
If application is made....for reimbursement of direct loss and expense
attributable to more than one head of claim and at the time when the loss or
expense comes to be ascertained, it is impractical to disentangle or

disintegrate the part directly attributable to each head of claim then, provided
of course that the contractor has not unreasonably delayed in making the
claim and so has himself created the difficulty, the architect must ascertain
the global loss attributable to the two causes ....
There were then a number of cases which where heralded as sounding the end of
global claim.
An example of this strict approach was the Privy Councils decision of the Hong Kong
case of Wharf Properties v Eric Cumine Associates (No. 2) [1991] 52 BLR 8,
where the clients actions against their architects for negligent design and contract
administration were struck out as incomplete and therefore disclosing no reasonable
course of action.
Per Lord Oliver
the pleading is hopelessly embarrassing as it stands....in cases where the full
extent of extra costs incurred through delay depend upon a complex
interaction between the consequences of various events, so that it may be
difficult to make an accurate apportionment of the total extra costs, it may be
proper for an arbitrator to make individual financial awards in respect of
claims which can conveniently be dealt with in isolation and a supplementary
award in respect of the financial consequences of the remainder as a
composite whole. This has, however, no bearing upon the obligation of a
plaintiff to plead his case with such particularity as is sufficient to alert the
opposite party to the case which is going to be made against him at the trial.
But this hard-line position has historically been balanced by exceptions and
qualifications:
ICI Plc v Bovis Construction Ltd Queen's Bench Division, 17 February 1992
The ICI case arose out of the refurbishment of ICIs premises where the cost rose
from an original estimate of approximately 30m to over 53m. A global claim was
made against the main contractor, the architects and the consulting engineers. The
global claim for abortive work in respect of hundreds of items amounted to 840,211.
It was said that the apportionment was impossible. The defendants asked, if they had
a complete defence to all the items save for two minor ones- circuits need changing
and fire bell repositioning - what monetary consequences would flow from these two
items? The judge held that if any of the events could not be proven at trial, the only
consequence is that actual sum paid will fall to be distributed between a lesser
number of events, not that the total recoverable will be less. The judge found it
palpable nonsense that 840,000 could be the cost of repositioning a fire bell.
GMTC Tools v Yuasa Warick Machinery Court of Appeal (Civil Division), 24
November 1994
A manufacturing company sued the firm which had supplied it with an unreliable
computer controlled precision lathe. The claim was global to the extent that it did not
deal precisely with the costs arising from each and every breakdown. The judge
ordered that more detailed information be provided. The Court of Appeal held that the
judge was not entitled to require a party to establish causation and loss by a

particular method. Subject to the respondent knowing the case it had to answer, the
claimant could formulate its claim for damages as it wished.
British Airways Pensions Trustees v Sir Robert McAlpine (1994)
A dispute arose in connection with the diminution in value of a development property
due to defects. The amount claimed was 3.1m. The respondent sought particulars in
respect of each and every defect and when not provided the judge ordered that the
claim be struck out. The Court of Appeal reversed the decision with Lord Justice
Saville saying:
The basic purpose of pleading is to enable the opposing party to know what
case is being made in sufficient detail to enable that party properly to prepare
to answer it. To my mind it seems that in recent years there has been a
tendency to forget this basic purpose and to seek particularisation even when
it is not really required. This is not only costly itself, but is calculated to lead to
delay and interlocutory battles in which the parties and court pore over
endless page of pleadings to see whether or not some particular point has or
has not been raised or answered, when in truth each party knows perfectly
well what case is made by the other and is able properly to prepare to deal
with it. Pleadings are not a game to be played at the expense of the litigants,
nor an end in themselves, but a means to the end, and that end is to give
each party a fair hearing. Each case must of course be looked at in the light of
its own subject matter and circumstances.
2

RE-EMERGENCE OF GLOBAL CLAIMS

2.1

Overview
The judgement in Scottish decision of John Doyle Construction Limited v Laing
Management (Scotland) Limited (2004) represented a major shift in judicial
approaches to global claims, adopting a much more permissive stance. A more
relaxed view of global claims has now been endorsed by the English courts in
London Underground Limited v Citylink Telecommunications (2007).

2.2

John Doyle Construction Limited v Laing Management (Scotland) Limited

John Doyle were works contractors employed by management contractors Laing
under an amended Scottish Works Contract Form, the project being the construction
of a new corporate headquarters for Scottish Widows. John Doyle claimed a 22 week
extension of time and 4.8 million for loss and expense caused by delayed and
disruption. Laing argued that since John Doyle had made a global claim, if any of the
loss and expense in it was not caused by them, the whole claim must fail. Lord
MacFadyen at first instance felt that it would be wrong to exclude, at this stage, the
possibility that the evidence led at proof before answer will afford a satisfactory basis
for an award of some lesser sum than the full global claim.
The decision of the Inner House on Laings appeal is an important re-assessment of
the modern law.
The findings of the Inner House can be summarised as follows:

Individual causal links must normally be proved between each breach/claims

event and each item of loss and expense.

If this is impossible, the claims events can be pleaded as producing a cumulative

effect so long as the contractor can show that all the events pleaded are the
responsibility of the employer. In this situation a global claim can succeed.

However even where the loss has been caused both by matters for which the
employer is responsible and by matters for which he is not responsible the claim
can still succeed if those for which the employer is responsible are the dominant
cause of the loss. (Equally if matters for which the employer is not responsible are
the dominant cause of the loss then the global claim will fail).

Even where it is not possible to identify a dominant cause of the loss and the
causes are truly concurrent a global claim may partially succeed. It may be
possible for the tribunal to make an apportionment between those matters for
which the employer is responsible and those for which he is not responsible. In
this way the tribunal could apportion liability for the loss and award the contractor
a part of his global claim.

In pleading the claim, both the events relied on and the heads of loss must be set
out comprehensively. The pleading of causation should be simple and not
elaborate. Causation is largely a matter of inference and the evidence on it will
usually be in experts reports. Consideration of this aspect should wait until all the
evidence is before the tribunal.
There are three main changes in emphasis in the law in John Doyle and each is,
to a greater or lesser extent, encouraging of global claims. These are
summarised as follows:

2.3

Whereas previously it was understood that any cause of loss shown to be not
the responsibility of the defendant would be fatal to the global claim, it now
appears that this only applies if the cause of loss is dominant.

The court seemed comfortable with the idea of apportionment of loss by the
tribunal between causes for which the employer is and is not liable, even if
this may be a rough and ready process.

The issue of whether causation can be proved should normally wait until the
trial when all the evidence is in and so, presumably, would not be decided at
the interlocutory stage on an application to strike out.

London Underground Limited v Citylink Telecommunications

The project involved the replacement of the communications system throughout
Londons underground rail network together with the operation of that new system.
Citylink claimed an overall extension of time, based on a large number of alleged
breaches of contract by London Underground Ltd, which was alleged to have caused
delay.
An adjudicator and then an arbitrator rejected the global claim. The arbitrator however
recognised that even if the global claim failed that may not be the end of the matter.

There may be sufficient evidence of a surviving claim to establish a connection

between an individual loss and an individual event. London Underground Limited
challenged the arbitrators award and argued that it should have ended at the finding
on the global claim.
The Judge held that there was, in principle, no objection to an arbitrator taking such a
course provided the result was based on primary facts that had been at issue in the
proceedings. The arbitrators finding was based on the case presented, argued and
dealt with in the evidence, taking account of the failure of the global claim. The judge
considered that there was nothing in this case that required the arbitrator to seek
further submissions.
The decision in London Underground v City Link is not a green light for global
claims but the reverse, since the arbitrator decided only that issue where the
evidence showed a connection between delay and the event. In most cases, the
tribunal will not immediately decide the surviving claim but will give the parties the
opportunity to make further submissions.
2.4

Lessons for those seeking to bring global claims

Factually

Establish that it is impossible to bring the claim any other way;

Be careful to call evidence to suggest that it is not your fault; but not too much
evidence or this becomes a battle ground;

Establish that no element of the sum claimed has already been recovered: but
keep this at a high level unless the point is seriously challenged;

Establish there is no material causative factor causing the delay, disruption or

cost for which the Defendant is not liable. In doing so recognise that confusion is
the key here and that the ultimate goal is to convince the Court that you are not to
blame for a significant amount of the loss being claimed.

Experts
The quality of a global case is extremely dependent on the expert chosen. It is
important to retain the best expert as early as possible.
2.5

Attacking a global claim

Factually
For those seeking to resist a global claim they should try to do as follows:

Show that it is possible to bring the claim in other ways or, if not, that it is at least
partly the Claimants fault.

Try to establish that the sum claimed has already been recovered

Establish that there are many other material factors causing the delay, disruption
or cost for which the defendant is not liable.

Tactically

Strike Out
In some cases, it may be possible to make an application to strike out the claim
before trial. However, to be successful, the applicant must show not only that the
claim is hopefully vague and unclear but also not only that the claim is hopelessly
vague and unclear but also that it is prejudicial in its defence of the claim. The
court have been keen to stress that tactical applications to strike out will be
rejected and adverse cost orders may be made.

Inference
The important point to bear in mind is that the claim is based on a inference- that
each and every variation or event either lead to cost or caused delay or
disruption. The key to destroying a claim is to attack the inference thus, if any
other event or variation is identified that did not lead to cost or expense, the claim
fails.
In a delay claim the most effective response is a pure factual and logical analysis
of each delaying event. Ascertain the event, ascertain whether it is on the critical
path, calculate the delay and ascertain whether the delay was critical. If it is then
the contractor is entitled to the days delay actually caused.

CPR 36 offer
Rebutting the inference may well suggest that other sums are actually due and
owing or that the contractor is entitled to a different extension of time. It is
therefore critical to obtain a rough estimate of the sums owing/ the extension of
time and make an early and generous CPR 36 offer if only to protect against the
considerable experts costs that will be incurred.

AVOIDING A GLOBAL CLAIM

3.1

Records
To pursue a dispute requires evidence that a particular event caused the extra costs
to be paid. Getting the evidence particularly for multiple events can be expensive.
To avoid having to make a global claim it is necessary to be able to break down the
contribution of each event, and the easiest way to avoid this and the expense of
going back and finding evidence is to keep up to date and accurate records.
The Society of Construction Law Delay and Disruption Protocol, (which discourages
the making of composite or global claims by contractors) states, in effect, that if
accurate and complete records are maintained, the contractor should be able to
establish the causal link between an Employer Risk event and the resultant loss
and/or expense suffered without the need to make a global claim.

The Protocol goes on to state that the failure to maintain such records does not justify
the contractor in making a global claim.
The Protocol contains detailed guidance as to the keeping of records and
recommends that the parties reach a clear agreement on the records to be kept. The
Protocol also contains model clauses in relation to the keeping of records.
The Protocol is not a statement of law. However, it is undoubtedly better practice to
keep good records and address delay and disruption issues when they arise, rather
than to deal with them after the project has been completed.
An employer might be well advised to insist, by way of express contractual provisions,
that a contractor maintains the records recommended by the protocol. This may limit
the necessity and opportunity for making a global claim but it is unlikely, to eliminate it
entirely.
If there is a contractual obligation upon the contractor to maintain particular types of
records, perhaps in a defined format with a certain degree of detail then, if a failure to
do so results in the pursuit of a global claim, it is not difficult to see that this would be
another factor for a tribunal to consider when determining the merits of a global claim.
However, in the post John Doyle era it seems unlikely that an assertion by an
employer that a contractor has failed, in breach of contract, to maintain certain
records would form the basis of a successful strike out application.
The quality of records maintained is plainly a question of degree and detailed
consideration would be required of (a) the records in existence and (b) the reasons
for the non-availability of other records.
The more records kept the better and it is not just a case of keeping records up until
practical completion of the project. The minimum period that records should be kept is
six years and if the contract is signed as a deed then records should be kept for 12
years.
3.2

Contractual Requirements
All too often, things go wrong on construction projects for reasons beyond the control
of a contractor and for which they should be compensated under the terms of their
relevant contract.
Frequently due to a failure to give the appropriate notice, contractors fail to achieve a
satisfactory financial settlement. Unfortunately, it is not usually possible to remedy
such a situation retrospectively. Accordingly, close attention should be paid to the
notice provisions of the contract.
For example, attention should be paid to the words shall and may. If it is stated
that a notice shall be served rather that may such notice must be given for it to be
effective.
Other common contractual provisions in respect of notices include notices to be given
in writing or verbal notices to be followed up with a written notice.

3.3

Entire Agreement clauses

An entire agreement clause will ensure that no varied or additional conditions exist
with respect to the performance of the contract beyond those that are stated in the
contract and any previous negotiations in which the parties to the contract had
considered different terms will be deemed superseded by the final written version.
If the contract is to contain such a clause it is important that all requirements for
documents etc are put into place before the contract is entered into.

CONTACT
Hammonds
Trinity Court
16 John Dalton Street
Manchester M60 8HS
DX 14347 MANCHESTER 1

David Moss
Partner
Telephone No: 0870 839 5052
Fax No: 0870 460 3506
E-mail: david.moss@hammonds.com

Gregory Buckley
Solicitor
Telephone No: 0870 839 5025
Fax No: 0870 443 4158
E-mail: gregory.buckley@hammonds.com

Claire Rawlinson
Solicitor
Telephone No: 0870 839 5168
Fax No: 0870 460 3029
E-mail: claire.rawlinson@hammonds.com