Gleeds faces court battle over project cost hike

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Gleeds faces a tribunal conflict aft costs soared connected a mixed-used strategy successful West Berkshire.

Standard Life Assurance started proceedings aft costs connected the task ballooned from an estimated £85m to £146m.

Gleeds had hoped to artifact tribunal proceedings. However, a High Court justice has ruled that the assertion tin beryllium heard successful full.

Gleeds was employed arsenic a outgo advisor and quantity surveyor connected the mixed-use residential and commercialized strategy successful Newbury successful West Berkshire. Costain was employed arsenic a contractor connected the occupation successful 2008, which Gleeds estimated would outgo £85m successful total. By the clip the occupation was completed successful July 2013 it had outgo £146.4m.

Standard Life Assurance has started proceedings against Gleeds, arsenic good arsenic task manager Buro Four and improvement manager Shearer Property Group. It alleges that the 3 defendants had “negligently advised” that the occupation would outgo astir £85m, and that the procurement strategy utilized by them resulted successful a “high hazard gathering contract”.

That meant determination were a fig of costs included successful the fixed terms declaration which could not really beryllium determined astatine the clip of the declaration award. Standard Life argues that it had not been notified intelligibly astir those risks.

“[Standard Life] would person abandoned the development, would not person entered into the gathering declaration and [would not have] issued the written bid to commence the works,” a tribunal submission reads.

Standard Life's submissions adhd that had it been advised of the risks linked to the procurement strategy and gathering contract, successful summation to the existent operation cost, past it would not person agreed to the deal. It is suing for damages totalling £20.1m, connected the ground that it says it should person been quoted a operation outgo of £105m.

The defendants tried to onslaught retired the assertion from the tribunal connected the ground that it should not see the costs which it could not person foreseen, and that they should get “credit” for the benefits the lawsuit has already received from the development.

But that was declined by the court, meaning the quality volition beryllium heard successful October 2023. The lawsuit is acceptable to past for 12 weeks.

Standard Life had claimed determination was nary payment from the improvement which would pb to recognition for the defendants.

In an earlier league connected the lawsuit past year, Standard Life claimed the outgo accrued owed to changes successful the declaration item and delays and disruption to the job. It said the delays had led to £21.9m of accrued costs.

During that session, Mr Justice Fraser warned Gleeds and the remainder of the parties progressive against utilizing “litigation warfare” to resoluteness operation disputes, aft they had spent much than £130,000 connected ineligible fees during that league alone.

The lawyer for Standard Life had argued meantime that the defendants were being “as hard arsenic they can, and looking for matters astir which to complain”.

Construction News has contacted Gleeds, Shearer Property, Buro Four and Standard Life for comment.