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Involved in a Contract Dispute? Compromise is King!

Litigating breach of contract disputes is costly and, with outcomes never predictable, compromise on the basis of legal advice is very often the better course. In one case which proved the point, sub-contractors involved in a gas pipeline project sued for £10 million but ended up having to repay almost £2.5 million.

The subcontractors made disruption and prolongation claims against the project’s main contractor. It was said that work had been delayed by unforeseen ground conditions and that the main contractor’s failure to obtain necessary permissions, agreements and equipment in a timely manner had further disrupted the work.

The High Court hearing of the dispute spread over almost three weeks and involved 70 lever arch files of documents. The subcontractors had valued their various claims at £10 million at the start of the trial but, by the close of submissions, that had been cut down to about £2 million in the light of the evidence.

In a ruling which ran to almost 500 paragraphs, the Court rejected the majority of the subcontractors’ claims. In the light of the Court’s ruling, they were entitled to recover a total of £363,226. That sum had to be set against much larger interim payments made to the subcontractors by the main contractor in respect of the claims. The total sums repayable by the subcontractors came to a minimum of £2,484,231.