FES’s attempt to recover costs from Covid-19 delays was rejected by the Scottish court.
- The dispute revolved around a £1.8 million cost from the 177 Bothwell Street project in Glasgow.
- FES’s interpretation of contract clauses was central to the case, which began in 2022.
- The court upheld the importance of timely notification clauses in contracts.
- The decision followed previous rulings favouring HFD Construction, the project’s developer.
FES, a prominent technical services company, faced a significant legal setback in the Scottish courts as it sought to recoup £1.8 million in costs incurred due to Covid-19 delays. The case centred around the development of 177 Bothwell Street, a major office building in Glasgow, where FES had been contracted to carry out extensive fit-out work that commenced in 2020.
The legal dispute, which has been ongoing since 2022, arose from FES’s claim that they were entitled to compensation for delays caused by the Covid-19 pandemic. Central to the case was the interpretation of specific clauses in the Standard Building Contract with Quantities, used in Scotland. FES argued the contract’s wording entitled them to recover related losses. However, the court found no ambiguity in the notification clause and ruled that FES had failed to notify other parties of potential liability within the required timeframe.
The contract required contractors to alert the architect or contract administrator promptly when a delay became apparent, along with an initial assessment of the incurred loss. FES contended that these notification requirements were not conditions precedent, meaning they should not impact the right to claim additional costs. They highlighted that similar contracts did not treat these clauses as preconditions for entitlements.
In contrast, HFD Construction’s legal team emphasised the need for these clauses to protect clients from unexpected claims and ensure contractors follow agreed procedures. The court, led by Lord Carloway, supported this interpretation, noting that the phrase ‘subject to… compliance with the provisions of [the] clause…’ was conclusive evidence of the requirement for notification.
Previous judgments from an adjudicator and a commercial court had already sided with HFD Construction, and the recent ruling further solidified this position by refusing FES’s reclaiming motion.
Ultimately, the court reaffirmed the necessity of adhering to contractual notification clauses in construction agreements.
