Potential heads of claim - Building Contract Claims - page 112

£232,000. Whether this was a satisfactory method of approach need not be
decided now, though I have substantial doubts on the matter.' 329
A case involving a successful claim for loss of profit on a somewhat different
basis is Wraight Ltd v. P. H. & T. (Holdings) Ltd 330 , where the contractors
properly determined their own employment under clause 26 of JCT 63 and,
therefore, correctly claimed as part of the direct loss and/or damage the
profit they would have earned had they been able to complete the contract
work. The judge had little hesitation in finding it to be a valid claim. He said:
'In my judgment, the position is this prima facie , the claimants are entitled
to recover, as being direct loss and/or damage, those sums of money
which they would have made if the contract had been performed, less the
money which has been saved to them because of the disappearance of
their contractual obligation.' 331
In referring to 'those sums of money which they would have made' the
judge went to the nub of the matter. What is recoverable is the actual profit
on that contract. The profit which might usually be obtained in such cir-
cumstances is not relevant. This situation is distinct from that referred to
above, where the contractor is prevented from obtaining an exceptional
profit on another contract 332 . The difficulty here is in determining the level
of profit the contractor would have made if he had been allowed to do the
work. It is probably not enough for the contractor simply to demonstrate the
profit he put into his tender, because such profit may not have been realis-
able. The Wraight case must also be distinguished from normal claims for
direct loss and/or expense arising from delay or disruption, because the
profit lost in this instance was that which would have been earned on work
that the contractor was not permitted to carry out 333 rather than work which
was delayed or carried out under different conditions than those originally
anticipated.
6.5.4 Inefficient or increased use of labour and plant
Delay and disruption can lead to increased expenditure on labour and plant
in two ways. It may be necessary to employ additional labour and plant or
the existing labour and plant may stand idle or be underemployed. The
latter is sometimes referred to as 'loss of productivity'. Although this is an
allowable head of claim, it can be difficult if not impossible to establish the
amount of the actual additional expenditure involved. Contractors com-
monly attempt to overcome this problem by presenting the claim on a total
cost basis. In other words, they maintain an entitlement to be remunerated
329 (1970) 1 BLR 114 at 126 per Edmund Davies LJ.
330 (1968) 13 BLR 27.
331 (1968) 13 BLR 27 at 36 per Megaw J.
332 See Parsons (Livestock) Ltd v. Utley Ingham & Co Ltd [1978] 1 All ER 525.
333 See Chapter 4, section 4.4, 'Omission of work to give it to others'.