Payment - Scottish Construction Contracts - page 218

between events which give rise to extension of time only and those which confer
a right to money. Core clause 60.1 sets out a number of compensation events for
which the Contractor is entitled to claim both time and money. hese are described in
more detail in Section 6.11.11. 6.11.11.There are detailed notification provisions contained in
clauses 61 and 62 of the NEC3, while clause 63 governs the assessment of the compen-
sation events. As discussed earlier in Section 8.2.5, clause 63 provides that the changes
to the Prices are assessed as the effect of the compensation event on the actual Defined
Cost of the work already done, the forecast Defined Cost of the work not yet done
andtheresultingFee.heefectofthecompensationeventonthecostofcarrying
outtheworks,whetherbywayofdelayordisruption,willformpartofthatassess-
ment. In contrast to the SBC and the SBC/DB, clause 63.4 provides that the rights
of the Employer and the Contractor to changes to the Prices, the Completion Date
and Key Dates are their only rights in respect of a compensation event. In those cir-
cumstances,careshouldbetakenbyaContractortoensurethatifacompensation
event arises it strictly adheres to the terms of core clause 6, as otherwise it will not
be entitled to additional payment in respect of the compensation event. In relation to
compensation events in respect of changes under the NEC3, see also Sections 4.5.2
and 5.2.4.
As one might imagine, the loss and expense provisions to be found in the standard
form building contracts have been considered by the courts on numerous occasions.
It is not possible to give detailed consideration to all the available case law in this
book. However, Scotland does have the benefit of an Inner House decision reviewing
the law in this area. In the case of John Doyle Construction Ltd v. Laing Management
(Scotland) Ltd (2004) the court held that for a loss and expense claim under a building
contract to succeed, the contractor is required to prove three matters:

• the existence of one or more events for which the employer is responsible, for

example, a Relevant Matter under clause 4.24 of SBC;

• the existence of loss and expense suffered by the contractor; and

• a causal link between the event or events and the loss and expense.

hisstatementisconsistentwithearliercasesinthisareainwhichithadbeenheldthat
direct loss and expense was that which flowed naturally in the usual course of things.
See,forexample, FGMinterLtd v. WelshHealthTechnicalServicesOrganisation (1980)
following Saint Line Ltd v. Richardsons Westgarth & Co. Ltd (1940).
However, it is not always straightforward to establish the causal link between an
event and a particular item of loss and expense. Indeed, in many instances loss and
expense to the contractor are caused by a number of events which may be the respon-
sibility of the employer, the responsibility of the contractor or the responsibility of
neither party. In such instances it may not be possible to identify the causal link
between each individual event and the items of loss and expense incurred by the
contractor. In such cases attempts have been made by contractors to pursue global
claims against employers, where little or no attempt is made to establish any causal
link, with varying degrees of success. See, for example, London Borough of Merton v.
Stanley Hugh Leach Ltd (1985) and Wharf Properties Ltd v. Eric Cumine Associates
(No. 2) (1991).