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Alf McAlpine looks to save legal penalty

Damages from Guildford office job could top £6 million after delays hit contract

ALFRED McAlpine has launched a legal action to contest a £6.1 million penalty on an office contract running over two years late.

The firm is heading back to court only months after its costly showdown with family rival Sir Robert McAlpine to fight a claim from developer Tilebox for liquidated damages.

Alfred McAlpine entered into a contract with Tilebox in April 2001 for an £11.5 million office building in Guildford, Surrey.The block, to be known as Onslow House, was originally due to be completed in July 2002, although this date was later extended to August 14, 2002.

But sources close to the job claim the offices will not be finished until this April, exposing Alfred McAlpine to a potentially massive penalty.

According to the writ filed by Alfred McAlpine in London's Technology & Construction Court, Tilebox, which is backed by Standard Life Investments, is entitled to claim damages at a rate of £45,000 per week.

When the writ was filed on December 20, the total figure had already reached £5.49 million. If the project is finished in April the total will have risen by £670,000, bringing the final bill to more than £6 million.

Alfred McAlpine's legal action centres on its claim that the figure of £45,000 per week is not a realistic measure of Tilebox's losses.

One legal expert said: 'If they are successful, Tilebox will have to prove the extent of their losses, which could be expensive.'

But she added that Alfred McAlpine may be facing a difficult challenge: 'There was a case when someone accidentally filled in the damages figure as nil and the judge upheld that. It is quite strictly enforced.'

It is not clear why the office block has been delayed for such a long time, although an insider close to the project said there had been 'subcontractor issues' Neither firm was willing to comment on the case.