Expert Witness Journal Issue 64 December 2025 - Flipbook - Page 28
entitlement and the 昀椀nancial assessment ensures
that the analysis is both reliable and persuasive. In
the case of Esso Petroleum Co Ltd v Mardon (1976),
damages were awarded for negligent misstatement
and highlighted that the divide between a statement
of opinion and of fact becomes more signi昀椀cant
if a party holds themselves out as having expert
knowledge.
failing to answer questions directly. These criticisms
underline the need for experts to exercise careful,
balanced judgment and to communicate their
reasoning clearly, particularly when addressing
alternative measures of loss.
Balance and No Loss
A credible analysis looks at both sides of the picture.
Losses must be assessed, but so must any gains or
advantages that occur during a project. While
breaches or delays often lead to extra costs, they
can also result in savings or e昀케ciencies if the work
is carried out in more favourable conditions. If
an expert only reports the losses and ignores the
bene昀椀ts, their evidence risks appearing biased. A
balanced assessment, by contrast, shows fairness and
objectivity.
A core part of quantum analysis is showing that the
costs claimed were caused by the issue in dispute. It
is not enough to demonstrate that money was spent;
the analyst must prove that the expenditure arose
because of the breach.
The law also places limits on the losses that can be
recovered. Costs that are too remote, or that could
not have been foreseen, will not be accepted. A good
analyst presents a clear chain of cause and e昀昀ect,
ensuring that each item of loss is linked directly
to the event in question. Including unrelated or
exaggerated costs only undermines the credibility
of the report.
The courts have also recognised that in some cases
no real monetary loss is su昀昀ered. Sometimes the
works leave the claimant in a better position than
before, or savings o昀昀set the extra costs. This is often
described as betterment. Where betterment or
collateral advantages exist, tribunals expect experts
to re昀氀ect these openly in their calculation.
In Hadley v Baxendale (1854), the court con昀椀rmed
that only losses foreseeable at the time of contracting
can be recovered. Similarly, in Quinn v Burch Bros
(1966), the court held that a breach which merely
provided the occasion for an accident, rather than
causing it, did not give rise to damages. Together
these cases illustrate why a quantum analyst must
carefully connect the claimed costs to the actual
breach.
In Walter Lilly & Co Ltd v Mackay & DMW
Developments Ltd (2012), one expert was criticised
for focusing heavily on additional costs while failing
to account for e昀케ciencies and overlapping causes
of delay. Similarly, in cases involving betterment,
courts have con昀椀rmed that a claimant who bene昀椀ts
from an improvement cannot recover the full cost
as though no gain had been made. These examples
highlight why recognising both losses and gains is
essential to producing credible and reliable analysis.
Choosing the Right Measurement of Loss
Construction disputes often present more than one
way to measure monetary loss. A defect, for example,
might be valued either by the cost of recti昀椀cation or
by the reduction in the property’s value. The task of
the quantum analyst is to select the measure that
most accurately re昀氀ects the circumstances of the
case, rather than simply the one that produces the
largest 昀椀gure.
Spare Capacity and Voluntary Costs
Not all costs claimed are recoverable. Some resources
have spare capacity and would have been incurred
regardless of the breach. Common examples include
tools that are already owned, overheads that would
have been paid in any event, or sta昀昀 who were not
fully occupied. Similarly, some expenditure may be
undertaken voluntarily, such as excessive tendering
or internal allocations that are not a direct result of
the dispute.
In Ruxley Electronics and Construction Ltd v
Forsyth (1996), the House of Lords held that
reinstatement costs were disproportionate where
the actual loss in value was minimal. Instead,
damages were awarded for loss of amenity. This
case illustrates that the correct measure of loss is
not always the most expensive one, and why analysts
must exercise careful judgment in recommending
an approach. The importance of careful judgement
was also highlighted in the recent Notting Hill moth
infestation case. The High Court judge criticised
the expert’s grasp of the issues and described his
judgment as “昀氀awed in many instances.” He was
also criticised for being unwilling to make sensible
concessions, instead arguing with counsel, and often
EXPERT WITNESS JOURNAL
In Alfred McAlpine Homes North Ltd v Property
and Land Contractors Ltd (1995), Judge Lloyd QC
examined whether certain overheads should be
treated as 昀椀xed or variable. He concluded that not
all overheads could be directly attributed to the
delay, meaning they could not be claimed in full.
This case highlights why analysts must scrutinise
whether claimed costs genuinely 昀氀ow from the
breach, or whether they simply re昀氀ect resources that
already existed.
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DECEMBER/JANUARY 2025-2026
