Case No 14
Case name Whittall Builders Company Ltd v Chester-le-Street District Council
Year 1985
Subject matter Disruption
Measured Mile
Contractors and subcontractors readily recognise when they are losing money in respect of their labour costs and often suspect that the basic reason lies with the employer, Architect or Engineer. Producing convincing evidence that this is where the problem lies can however be problematic.
This case provides one avenue which under appropriate circumstances could assist contractors and subcontractors in producing the necessary evidence.
The facts of the case arise from a contract let by Chester-le-Street the defendant to Whittall Building Company Ltd the plaintiff for the refurbishment of 90 dwellings. Difficulties were experienced by the defendant in granting possession of the properties. The court found that during the period when these problems existed the contractor was grossly hindered in the progress of his work and as a result ordinary and economic planning and arrangement of the work was rendered impossible. However a stage was reached in November 1974 when dwellings were handed over in an orderly fashion and no further disruption occurred. The court had to decide the most appropriate method of evaluating the disruption which had resulted from the problems relating to the handover of the properties. Of the variety of methods presented before the court Mr Recorder Percival had this to say:
“Several different approaches were presented and argued. Most of them highly complicated, but there was one simple one – that was to compare the value to the contractor of the work done per man in the period up to November 1974 with that from November 1974 to completion of the contract. The figures for this comparison, agreed by the experts for both sides were £108 per man week while the breaches continued, £161 per man week after they ceased.
It seemed to me that the most practical way of estimating the loss of productivity and the one most in accordance with common sense and having the best chance of producing a real answer was to take the total cost of labour and reduce it in the proportions which those actual production figures bear to one another – i.e. by taking one-third of the total as the value lost by the contractor. (This roughly being the difference between the productivity when work was not disrupted i.e. £161 per man week and £108 per man week when work was disrupted)
I asked both (counsel) if they considered that any of the other methods met those same test as well as that method or whether they could think of any other approach which met them better than that method, In each case the answer was “no” Indeed, I think that both agreed with me that that was the most realistic and accurate approach of all those discussed. But whether that be so or not, I hold that it is the best approach open to me, and find that the loss of productivity of labour and in respect of spot bonuses which the plaintiff suffered is to be quantified by adding the two together and taking one-third of the total.”
There should be little difficulty in calculating the productivity per man week using the build up for interim certificates. The productivity per man week could be calculated by dividing the number of man weeks worked during a valuation period into the value of work carried out, giving an output per man week.
This case demonstrates an acceptable method of evaluating disruption which became known as the measured mile.