Kier Business Services faces £206k school pay out after court ruling

10 April 2018 | By Neil Gerrard

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Kier Business Services has failed in an attempt to avoid a £206,000 High Court claim from another contractor to pay for remedial works on a school job that went wrong. The firm had argued that the claim was no longer legally enforceable.

RG Carter built a new science block at a grammar school in Boston, Lincolnshire in 2002. However the block, where Kier Business Services provided design services, started to leak water.

Lincolnshire County Council brought arbitration proceedings against Carter and the arbitration was settled in 2015, with the terms that Carter would carry out remedial works at its own cost.

In September last year, Carter issued proceedings against Kier seeking an indemnity or a contribution of £205,908.60 in respect of the cost of the settlement.

Unusually, Kier Business Services did not file a defence but deputy High Court judge Edward Pepperall QC said the firm “plainly intended” to plead that the claim was “statute barred” (therefore no longer legally enforceable).

In the complicated case, both sides agreed to enter into a “standstill agreement” on 28 April 2017, which is an agreement to suspend time for the purposes limitation on legal cases.

The court therefore had to decide whether the contribution claim had passed its two-year limitation period and was statute barred by that date – 28 April 2017.

Carter’s legal team argued that there was no agreement with Lincolnshire County Council as to the remedial works until they signed a settlement agreement on 29 June 2015 and that therefore the two-year limitation period did not expire until after the limitation period.

Kier Business Services’ legal team argued that the remedial works were agreed by 16 April 2015, or at the latest by 27 April 2015 and that therefore the claim was out of time by the date of the standstill agreement.

Pepperall ruled that there was no binding agreement between Carter and the Council by 28 April 2015 and that the contribution claim was therefore in time.

He concluded therefore that Kier Business Services’ limitation defence failed.

Construction Manager has contacted Kier Business Services for comment.

RG Carter has declined to comment.

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