No Compensation Where Loss Not Demonstrated


Critical path analysis is a technique whereby projects are planned by breaking them down into discrete operations, which are then split between those which must be done in a certain order, so that one must be finished before the next is started, and those that can run in parallel. The ones that must be completed before others can be started are described as being in the ‘critical path’ and a delay in completing something in the critical path usually results in a delay in completing the project.
In a recent case, construction group Costain was in dispute with a company that had designed the foundations for a water treatment works. The original design was defective and a redesign was necessary. It was agreed by both parties that the foundation works were in the critical path of the project and that some delay to the project would have occurred had the redesign not been undertaken.
When the project did overrun, Costain sought compensation for the extra overheads it incurred as a result of the delay. It argued that a delay to the project was inevitable once there was a delay in the completion of the foundations. Costain lost, however, because it had failed to undertake an investigation to demonstrate that the initial delay was the cause of the delay in completing the project and had been the reason for the increase in its costs.
“This case demonstrates the need to obtain evidence of loss when any claim is being considered,” says <<CONTACT DETAILS>>. “No matter how sure you are of the rightness of a claim, gathering appropriate evidence to support it is essential. We can advise you on the best way to proceed with any legal dispute.”

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