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Cleveland Bridge wins case against subcontractor over damages

Bridge contractor Cleveland Bridge has won a case against one of its subcontractors over damages linked to delays on a multi-million-pound roads project.

Cleveland Bridge brought the case against its subcontractor, crane operator Sarens UK, after its contract to deliver bridges for main contractor Costain on its £100m Heysham M6 project (pictured) was hit by delays, according to High Court papers.

The delays resulted in Cleveland eventually striking a “settlement agreement” with Costain, which would see it pay £957,000 in damages and waive its entitlement to a further £893,000 from the contractor.

This week’s decision came after Cleveland Bridge took Sarens to court over a dispute concerning a contract clause, which Sarens claimed capped its liability for any delay damages at 10 per cent of the subcontract value.

Cleveland contended that, while discussions had taken place with regards to implementing a 10 per cent cap, no formal agreement between the parties had ever been agreed.

The company said it had agreed all parts of the contract with Sarens before work began, but provision for damages had not been resolved.

Sarens put forward both a primary and secondary defence. The primary case claimed that a clause between Sarens and Cleveland had been agreed through a series of documents before work had begun.

The company’s secondary defence claimed that an agreement had been made by email after work had begun, which capped the liquidated damages at 10 per cent.

Joanna Smith QC, the judge presiding over the case, rejected both Sarens’ defences, stating that she could not find any evidence of a cap being agreed between both firms.

Ms Smith said: “It is my judgement that the parties never arrived at a concluded agreement in relation to damages; the provisions of paragraph 10 of the subcontract were never agreed and there was no subsequent agreement as to liquidated damages.”

The decision by Ms Smith came despite an adjudicator ruling in favour of Sarens in July 2017.

The case is part of a wider dispute between Cleveland Bridge and Sarens over the responsibility for the delays on the Heysham project and who is responsible for the damages.

Cleveland is currently seeking to recover the £957,000 it paid to Costain from Sarens.

According to the High Court papers, it was Sarens’ position that if Ms Smith had ruled that a 10 per cent cap had been agreed, Cleveland Bridge’s claim for any delay damages would likely be capped at £96,364 – 10 per cent of Sarens’ £963,634 subcontract.

Sarens declined to comment. Construction News has contacted Cleveland Bridge for comment. 

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