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Are You Being Sued? Swift Action is Imperative!

If you suffer the misfortune of being sued, swift action is imperative and good legal advice will ensure that you do not freeze in the headlights. In one case which made that point, a building contractor who responded to a client’s breach of contract claim in dilatory fashion ended up being heavily penalised in legal costs.

The contractor was engaged to design and construct a new racecourse grandstand. Following completion of the project, the grandstand’s roof was twice damaged by high winds. The owner of the grandstand sued the contractor for more than £5 million on the basis that the roof was defective and required replacement.

Early on in the proceedings, the owner made an offer in writing in which it urged the contractor to accept 95 per cent liability in respect of the claim. The latter did not respond to that offer and preparations for a trial of the action continued at considerable expense. The contractor subsequently received expert advice which indicated that it had no viable defence to the claim and conceded liability in full.

The High Court found that the contractor had failed to take steps to thoroughly and promptly investigate the owner’s claim. It would have been better off had it accepted the offer, which had been made as a genuine attempt to settle the matter. In those circumstances, the contractor was ordered to pay a substantial portion of the legal costs incurred on a punitive indemnity basis.