M&E firm Emcor has won a significant legal victory in a case brought by Carillion over delays in constructing the home of the Technology and Construction Court.
Lord Justice Jackson ruled at the Court of Appeal that Carillion was required to begin any extension to Emcor’s contract for the Rolls Building on the day the subcontractor’s work was originally due for completion.
Carillion was appointed in 2007 as main contractor for the Rolls Building project on Fetter Lane, London, and appointed Emcor as a subcontractor in 2008.
The overall project finished late, and Carillion is claiming damages caused by delay to the carrying out and completion of Emcor’s subcontract works.
Emcor insists it is not liable for such damages, claiming it was entitled to an extension of time and that this should be added to its initial target completion date even if the delay event occurred afterwards.
Carillion said the contract allowed for the provision of additional but discontinuous periods of time for the carrying out and completion of the subcontract works.
Under such a system, Emcor could be held liable for works that overran its original completion date even if an extension was then granted from a later date.
In a judgement at the TCC in April 2016, designed to clarify preliminary issues before a full hearing in June this year, Judge Recorder Nerys Jefford ruled that any extension of time under Emcor’s contract should have been added contiguously to the end of the period within which its subcontract works should have been completed.
At the Court of Appeal, Lord Justice Jackson held that the contract required Carillion to award extensions of time contiguously.
He added that the system of awarding extensions of time contiguously had “worked satisfactorily” in the construction industry for some time.
Robert Wheal, partner at law firm White & Case, which represented Emcor, said: “In a unanimous decision that provides welcome certainty to the construction industry, the Court of Appeal has confirmed that extensions of time awarded under a standard form of domestic subcontract, widely used throughout the UK construction market, must start on what was previously the date for completion.”
Carillion and Emcor declined to comment.
The main hearing will take place in June. Emcor denies liability and has made its own counter-claims against Carillion.