Cleveland Bridge UK Ltd v Severfield - Rowen Structures Ltd

A party claiming delay damages must prove that the complained-of event actually caused delay. The occurrence of variations, late information or late materials does not itself establish causation. In a complex construction project, delay must be analysed by identifying the relevant critical path and the work actually affected. Reasonable mitigation and acceleration costs may be recoverable even where the acceleration does not ultimately restore the programme, provided the costs relate causatively to the breach. The award must be reduced to reflect delay attributable to other causes and the point at which mitigation ceased to address the defendant’s breach.

The claimant fabricated and supplied steelwork for the first nine levels of the Shard under a subcontract with the defendant, which was responsible for erecting the wider steel structure. The claimant alleged that agreed programmes, variations, late information and late free-issue materials caused delay and sought payment for work and variations. The defendant counterclaimed for delay, disruption, acceleration costs, crane costs and defective workmanship. The court also had to determine the appropriate programme, the critical path, causation and the recoverable value of the parties’ claims.

1. Contractual programme. Neither the June Programme nor the December Programme was an expressly binding contractual programme. The subcontract nevertheless required the claimant to fabricate and deliver steelwork so as to enable compliance with the main contractor’s programme, subject to reasonable requirements and adjustment for delay-causing breaches or variations. The December Programme represented a realistic and reasonable programme which the defendant could reasonably require.
2. Claimant’s delay. The claimant failed to prove that the edge beam variation, late information or late free-issue materials caused delay. Delay analysis required evidence showing how the particular event affected fabrication. The evidence instead showed that the claimant’s delay resulted from an extraordinary overload of work, inadequate organisation and late sub-contracting. The claimant was therefore in breach of its subcontract obligations.
3. Causation and critical path. In a complex project, late completion of steelwork does not necessarily delay the whole project. The relevant critical path had to be identified. Phase 803 was the critical phase, and late delivery caused 38 days’ delay, with a further four days attributable to the Easter closure of the defendant’s paint shop. The defendant did not prove that later crane downtime, variations or remedial works caused further delay attributable to the claimant.
4. Mitigation and acceleration. It was reasonable for the defendant to introduce extended, night-time and weekend working to mitigate the six weeks’ delay caused by the claimant. Applying the approach stated by Lord MacMillan in Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452 at p 506, reasonable costs were recoverable even though the recovery programme ultimately failed. The award was reduced by 25 per cent to reflect delay not caused by the claimant and was limited to the period during which acceleration remained causally connected with the claimant’s breaches.
5. Disposition. The claimant was entitled to £928,472.55 plus VAT, subject to the defendant’s damages. The defendant was awarded £824,478.49 for delay and defects, together with further unquantified liability findings concerning specified non-conformance reports. VAT was payable only on the net balance after those damages were taken into account.