National Museums and Galleries on Merseyside v AEW Architects and Designers Ltd

In assessing damages for construction negligence, the claimant must establish the loss claimed, but the defendant bears the onus of proving a failure to mitigate. A claimant is not required to achieve the lowest theoretically negotiable cost where urgent remedial or acceleration measures are reasonably undertaken in response to the defendant’s breach. The court may assess future remedial costs using the evidence it considers the more realistic, allowing for access difficulties, out-of-hours working, contingencies, professional fees and the operational consequences of the works. Where causation is established but the injured person’s claim remains unquantified, the court may grant an indemnity declaration for the claimant’s potential liability.

The claimant sought damages arising from the collapse of suspended ceilings at the Museum, together with related pre-opening expenditure, future remedial works, internal staff costs, lost trading profit and an indemnity concerning potential liability to a person injured by falling ceiling tiles. The defendant disputed numerous heads of loss, principally on proof, valuation and mitigation grounds. The judgment determined quantum issues left after an earlier judgment on liability and other matters.

1. The court accepted agreed quantum figures and found that the claimant had established most of the disputed pre-opening costs. The measures taken after the ceiling collapse, including overtime, additional resources, remedial work and acceleration, were broadly reasonable and sensible.
2. The burden of proving a failure to mitigate rested on the defendant. It was insufficient to suggest that lower sums might have been negotiated or that a quantity surveyor would have paid less. The defendant had to establish that the claimant acted unreasonably. That burden was not discharged in relation to the substantial acceleration and subcontractor costs.
3. Future remedial costs were assessed on the evidence considered most realistic. The court preferred evidence allowing for difficult access, protection of exhibits, high-level and piecemeal working, out-of-hours rates, preliminaries, contingency and professional fees. It rejected allowances based on unrealistic productivity assumptions or reuse of ceiling tiles that had been disposed of.
4. The claimant’s internal staff and logistics costs were substantially recoverable. The evidence justified a programme of works allowing one principal gallery to remain open at a time, together with the necessary handling, storage, security, transport and backfilling arrangements. A rounded assessment of £60,000 was made for lost trading profit.
5. The claim for repayment of fees paid to the defendant was not proved because the evidence did not establish that the relevant variations remedied defects caused by the defendant’s negligence.
6. The court declared that, as between the claimant and defendant, the falling ceiling tiles were caused by the defendant’s negligence. The defendant was therefore required to indemnify the claimant against any liability to the injured person. The additional damages awarded totalled £1,236,419.24, exclusive of interest, with interest and costs reserved.