A QS nightmare

The traditional training of most QSs instills into them the necessity of getting the contract documents right. Any error could be very costly for the employer or contractor and in these litigious days potentially expensive for the QS. This lesson was brought home in the case of Midland Expressway Ltd v Carillion Construction (2006). A dispute arose in relation to three provisional sums that were included in the contract documents. They comprised a provisional sum of £1,900,000 for unspecified accommodation works; a provisional sum of £50,000 for aggregate tax and a provisional sum of £50,000 for future mining. One would have expected to see a clause in the contract that stated that the provisional sums would be omitted and the contractor paid the actual expenditure instead.

Unfortunately for the employer, this type of wording had not been included in the contract. The contractor therefore claimed an entitlement to payment of the provisional sum plus any amounts spent in respect of accommodation works, aggregate tax and future mining. One may use the timehonoured phrase “nice try”. The adjudicator was however convinced and decided in favour of the contractor. The matter was referred to the TCC court where Mr. Justice Jackson considered that the interpretation of the contract as made by the contractor did not make any commercial sense. In finding for the employer he pointed out that the term provisional sum is generally well understood in the construction industry and therefore the provisional sums are deducted from the contract sum and replaced by the amount of actual expenditure. The matter didn’t rest there as the contractor referred the matter to the Court of Appeal. Lord Justice May upheld the decision of Mr. Justice Jackson and found for the employer explaining that the use of the word provisional sum indicated that the parties did not expect that sum to be paid without adjustment. In his view the defendants’ submission offended that expectation.

This dispute arose out of the construction of the M6 Tollway, which is a PFI contract. These contracts are mainly drafted by lawyers many of whom have little or no experience of how the construction industry works and it often shows in the drafting of the contracts which like this one doesn’t reflect the expectations of the parties.