Why Courts Do Not Require Perfect Proof of Prolongation Costs
One of the more persistent arguments in construction disputes is that a prolongation claim should fail unless every dollar can be proven with complete precision.
The argument appears regularly in expert meetings, mediation submissions and cross examination. The underlying proposition is simple enough. If a contractor cannot establish its losses with mathematical certainty, the claim should fail.
That is not what the law requires.
The dispute arose from the construction of a substantial luxury residential development in London. As the project progressed, the contractor encountered extensive variations, design development and employer-driven change. Unsurprisingly, those issues affected both time and cost.
One of the arguments advanced against the contractor was that the claimed prolongation costs could not be established with sufficient precision.
Akenhead J rejected that approach.
His Honour recognised a reality that anyone involved in major projects understands. Construction projects are rarely neat. Records are not always perfect. Events overlap. Costs are often incurred across multiple activities simultaneously.
“The decision in Walter Lilly & Company Ltd v Mackay remains one of the most important authorities on prolongation costs because it addressed this issue directly.”
The law does not require perfection.
What it requires is evidence that allows the court to make a reasonable assessment of loss.
That distinction is important because prolongation claims frequently involve thousands of individual transactions spread across months or years. Expecting a claimant to isolate every cost item with complete certainty would often make recovery impossible, even where genuine loss has been suffered.
The judgment does not lower the standard of proof. Speculation remains insufficient. Assumptions remain vulnerable to challenge.
What the decision does recognise is that the assessment of damages is ultimately a practical exercise.
Courts routinely assess future economic loss, loss of opportunity and diminution in value despite obvious uncertainty. Construction claims are no different.
For quantum experts, the case provides an important reminder that the objective is not to create an illusion of precision. It is to demonstrate that the claimed costs were incurred, that they were caused by compensable events and that the assessment is reasonable having regard to the available evidence.
Lawyers should take the same lesson.
The strongest prolongation claims are not necessarily those supported by the largest volume of records. They are often the claims where the evidentiary pathway is clear, logical and capable of being tested.
Too much focus is sometimes placed on identifying minor imperfections in a claimant's records. A more useful question is whether those imperfections prevent a reliable assessment from being made.
If the answer is no, Walter Lilly suggests the claim remains very much alive.
References
Walter Lilly & Company Ltd v Mackay [2012] EWHC 1773 (TCC)https://www.bailii.org/ew/cases/EWHC/TCC/2012/1773.html
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