Before looking at global claims it is worth reminding ourselves of some basic common law principles as to what is meant by the recovery of damages and how they should be assessed. These are enumerated as follows:

The aim of damages for breach of contract is to put the claimant back in the position he would have been had the contract been performed as was intended(1).

When pursuing any claim the claimant has to prove:

  • That the breach of contract or duty or other claims’ event has actually occurred
  • That the Respondent is factually and legally responsible for it and
  • The loss claimed was caused by it

In complex cases there may be some difficulty in assessing what the damages are to flow from the offending party’s breaches of contract, where it is clear that some loss has been suffered then a court or arbitral tribunal is bound to do the best it can based upon the evidence available(2).

What is a Global Claim?

Difficulties arise then when a claimant makes a global claim, or as they are known in the US a total cost claim. In such an approach the claimant in effect says there a number of reasons, or heads, under which I make my claim, arising out of all of those heads I have incurred losses, it is not however possible or practical to assess which part of the money belongs to which head of claim.

The danger which has been perceived over the years to this approach is that the lack of particularity in the claim may mask losses that have been included by the claimant, which are either in fact the legal liability of the claimant themselves or are ‘neutral’ events.

Such neutral events might be weather-related delays where the claimant is entitled to additional time but not necessarily the money that goes with it.

It has been argued that to defeat such a global approach it is simply necessary to defeat one of the grounds for all the others to then fall, put the other way, for the claimant to succeed in a claim with ten heads of claim relating to one lump of money, then he has to hit the buttons on all ten heads to claim any of the money. It is submitted that by following the line of common law cases on this subject and the recent Scottish case of John Doyle -v- Laing Management in particular, that such a view would not be safe.

Line of Common Law Cases

As noted then, the problem of so called global claims have been considered over a series of cases in the context of construction contracts, firstly in the case of J Crosby & Sons Ltd v Portland Urban District Council(3) where Donaldson J said: “I can see no reason why the arbitrator should not recognise the realities of the situation and make individual awards in respect of those parts of individual items of the claim which can be dealt with in isolation and a supplementary award in respect of the remainder of these claims as a composite whole.”

In the case of London Borough of Merton v Stanley Hugh Leach(4) Nourse J said: “If application is made … for reimbursement of direct loss and expense attributable to more than one head of claim and at a time when the loss and 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…”.

The thrust of these cases then is that, where a tribunal is able, it should make awards on the identifiable heads, there may then be a residual amount where that is not possible and the approach then to be taken is one of making a supplementary award for those parts of the claim which are indivisible.

The approach in these two English cases was departed from somewhat in the Hong Kong case of Wharf Properties v Eric Cumine Associates (No 2)(5) where an Employer’s claims against its architects for negligent design and contract administration were struck out as incomplete and therefore disclosing no reasonable cause of action. It should be noted that Wharf was a judgment of the Privy Council, that is, it is the same judges who sit in the House of Lords only wearing a different ‘hat’, so to speak, when they hear cases from outside the English jurisdiction, in this case Hong Kong. It is probably the weight attached to being a Privy Council judgment that has led to this case leaving a lasting impression that global claims should be struck out.

That said, whilst the Wharf approach does appear to conflict with the Crosby principle it should be noted that the claim in Wharf was struck out only because the case, as pleaded, was as their Lordships put it, ‘hopelessly embarrassing’. Further, the judgment is at pains to point out that:

“As the argument has progressed, … it has become apparent that the case, whilst of obvious importance to the parties because of the sums involved, raises no question of any general importance, so that, in the event, their Lordships’ Board has been, exceptionally, concerned with a pure point of pleading peculiar to the particular dispute in which the parties are engaged.”(6)

An English case where the court must have felt that the pleading was not so ‘hopelessly embarrassing’ was that of Bernhards Rugby Landscapes Ltd v Stockley Park Consortium Ltd(7) where HH Judge Humphrey Lloyd gave the plaintiff leave to amend the claim since:

“its current form is not so oppressive or abusive as to justify refusal of leave to amend …. The deficiencies may … be cured by the provision of particulars or in some other way.”

The Controversial John Doyle Case

As noted above, the most recent case to cause a stir in this controversial areas of the law is that of John Doyle Construction Ltd v Laing Management (Scotland) Ltd(8), this is a case from the Inner House of the Court of Session in Scotland (that is the Scottish Court of Appeal).

The case involved the construction of a new corporate headquarters for Scottish Widows. Laing argued that Doyle had made a global claim (US$9.6M) and if any of the loss and expense in it was not caused by them the claim must fail. However, the Court held that:

That so long as the claimant can prove that all the events arise from defendant-culpable reasons and that they do not include any claimant-culpable or neutral events; that loss and expense has been suffered by the claimant and that there was a causal link between the two, then there is no need to demonstrate that particular heads of loss are attributable to individual events.

If a defendant asserts that there were claimant-culpable concurrent causes of delay which defeat the global claim then it is sufficient for the claimant to show that the defendant-culpable events were the ‘dominant cause’ of either the delay and/or the loss.

Even where it is evident that the defendant-culpable events are not the dominant cause of delay and/or loss then it may be possible to undertake an apportionment between defendant-culpable causes and other (that is claimant-culpable and neutral causes), the Court recognised that this might be a rough and ready process.

Global Claimant’s Charter?

It can be seen that in this case claimants have been given considerable benefit of the doubt and ‘get-out-of-gaol’ cards to get home on their global approach. The decision has attracted equal amounts of praise and criticism depending on whether one represent contractor or employer ‘camps’, some commentators even going so far as to say the case may be what happens north of the border but it does not represent English law(9).

Unfortunately for them Doyle has received some measure of approval in the English courts in the recent case of London Underground Ltd -v- Citylink Communications Ltd(10)

It is submitted however, that far from being a global claimant’s charter Doyle can be seen as simply as a restatement of some of the principles enumerated at the outset, that is that in cases where there are difficulties of assessment then the court or tribunal must simply do the best it is able based on the evidence.

There is sufficient caution within the line of cases cited, including within Doyle itself, to highlight to any claimant that embarking on a strategy of a global claim does still carry considerable risk.

Surely it is better for any claimant to spend a little time, effort, and yes, money to establish as best they can which tranches of money claimed belong to which delay or other event they are complaining of. Rather than, throw themselves on the mercy of the court or tribunal to come up with some apportionment which may well be a fraction of the claimed amount.

Attributions where possible

In most instances with a modicum of diligence it will be possible to establish various sources of cost, for example whilst general project management costs may not be, on-site supervision should normally be attributable to certain sections of the works.

Likewise, it should be a simple enough task for example to determine what periods of time were taken up in the more problematic sections of a tunnel drive, assuming the contract makes these Employer risk events, then one has a starting point for identifying the time related costs attributable to that period when the problems occurred.

On occasions there are genuine difficulties in gathering together sufficient particulars to make a realistic attribution of losses arising from particular events, however on other occasions, it has to be said it is simply a case of laziness and bad practice on the part of the claiming party.

The approach should be to make a court or tribunals task as straight forward as possible and protect ones own position by ensuring that as much of the claimed amount as possible is divided into attributable portions.

Reliance on global claim defence

For defending parties too there is quite some considerable risk in playing the global claim card, it is rare in any dispute resolution process that one will be gifted the knock-out blow of having one’s opponents case struck out completely.

Whilst it is not unusual to see the global claim defence pleaded only in the first alternative it should not be relied on to the extent that a defending party does not concentrate on defeating the claimant’s assertions on their individual merits, nor rolling up one’s sleeves and getting into the detail of the figure-work submitted by the claimant in support.

Conclusion

In conclusion therefore, some comfort can be taken by contractor claimants that the judicial tide is with them in terms of a reluctance to strike out claims at the first cry of ‘global claim’, however the approach should still be used with great caution, lest one’s claim be labelled as ‘hopelessly embarrassing’!


Paul Cullinan Global Claims