Bridge UK.Com Ltd (t/a Bridge Communications) v Abbey Pynford Plc

A claimant may recover losses caused by negligent delay in completing contracted works, including reasonable consequential expenditure and loss of profit, provided causation and the amount of loss are proved. Recovery must avoid double counting between wasted expenditure and lost profits. Where staff time is diverted to investigating or mitigating the wrong, the cost may be recovered if the diversion is sufficiently certain and materially disrupts the business. In assessing commercial interest, the appropriate rate may reflect the borrowing rate of businesses with the claimant’s general characteristics.

The claimant engaged the defendant to construct a piled foundation for a heavy printing press. The works were defective and required several stages of remedial work. The defendant admitted negligence shortly before trial, leaving causation and quantum in issue.

The claimant claimed losses including outsourced printing, professional fees, equipment and staff costs, cleaning, management time, and the cost of the unusable press. The court determined the period of delay, whether newly raised causation arguments could be advanced, the recoverability and valuation of each head of loss, and the appropriate interest rate.

1. Late arguments. Although an admission of liability left causation and quantum open in principle, the defendant could not introduce new contentions at trial which altered its pleaded or expressly accepted case. In any event, the alleged 28-day curing period and incompatible tolerance were not made out on the evidence.
2. Delay and causation. The contractual work should have produced a usable slab within 10 days. The relevant delay ran from 18 September to 28 October 2002, when the press was commissioned. The delay, remedial works and associated dust were attributable to the defendant.
3. Loss. The claimant recovered reasonable sums for outsourced work and transport, professional and installation fees, forklift hire, manufacturing disruption, cleaning, and management time. The court accepted a retrospective reconstruction of management time, subject to an appropriate discount for uncertainty.
4. Profit and expenditure. The claimant could recover loss of profit on outsourced work, calculated after allowing for costs it would have incurred itself. It could also recover an assessed proportion of the press rental and printers’ wages for work that could not be undertaken. The assessment had to avoid overlap between lost profit and wasted expenditure.
5. Management time. Applying the approach in R+ V Verischer AG v Risk Insurance and Reinsurance Solutions SA [2006] EWHC 42 (Comm), staff-time costs were recoverable because the managing director had been diverted from selling and marketing the business to dealing with the defendant’s failures. A claimed 25 per cent opportunity-cost uplift was not allowed.
6. Interest and order. Following the approach in Tate & Lyle Distribution v GLC [1982] 1 WLR 149, interest was to reflect the borrowing rate applicable to a business of the claimant’s general type. Judgment was entered for £61,636.42, with submissions invited on interest and costs.