Damages of £18.5 million were awarded against consultants Mott MacDonald in the High Court for negligence in connection with advice on a large contaminated land remediation project. Mott MacDonald was engaged by the Urban Regeneration Agency (URA) to act as consultants to investigate the extent of contamination on the former Royal Docklands site in Chatham. It was also responsible for advising on decontamination and the letting of contracts. The actual remediation work was carried out by a third party civil engineering contractor between 1990 and 1993, with Mott MacDonald acting as consulting engineer. A subsidiary of the URA, English Partnerships (Medway), carried out the day-to-day running of the project.
URA contended that the project only made economic sense if the cost of the decontamination was not greater than the value of the site as restored, estimated to be around £23 million. The cost of the project rose drastically when unforeseen contamination was encountered. URA claimed that Mott MacDonald had failed to provide proper advice and estimates of the degree of contamination and the clean-up costs before the project was undertaken, and further failed to provide corrective advice during the project. English Partnerships argued that, had it been given proper advice at the outset of the project or had interim warnings been given during the project, the scheme would have been aborted. In total English Partnerships claimed over £65 million in damages from Mott MacDonald.
The method employed by the civil engineering contractor was to excavate contaminated soil and dispose of it to landfill and the approach taken was to remove all contaminated material so that the site was completely clean. Mott MacDonald argued that this approach set too high a standard. At the time of the project, the usual approach was to identify threshold trigger levels for contaminants (a minimum concentration at which there was a possible need for decontamination) and action trigger levels above which clean-up measures should be taken. Mott MacDonald argued that, whatever the public perception, the only requirement was to remove contaminated soil which was considered to pose a threat to public health or the environment. Where concentrations were between threshold trigger levels and action trigger levels it was a question of engineering judgement whether there was Òsignificant" contamination which should trigger remediation. The URA, which was conscious of the marketplace and public perception required removal of all contaminants above threshold trigger levels from the site. The critical evidential issues were whether the URA's policy was properly communicated to Mott MacDonald and whether Mott MacDonald ever advised that a lesser standard of clean-up could be carried out without prejudicing public safety. The contract with Mott MacDonald required clean-up to "a standard sufficient to permit residential and/or commercial development". The court held that this meant that clean-up should be carried out to a standard reasonably required to have the site redeveloped, even though this might be more onerous than required solely by engineering standards. The court went on to consider whether Mott MacDonald had failed to exercise reasonable care and skill in various aspects of the contract. It concluded that there had been a number of failures in the initial site investigation in respect of which Mott MacDonald had failed to exercise reasonable care. Mott MacDonald had recommended that the decontamination would involve the removal of 360,000 cubic metres of material, an estimate that turned out to be less than a third of the quantity actually removed. The court was satisfied that URA had believed this estimate to be a reliable one. In addition, Mott MacDonald had failed to provide adequate advice on different approaches of its strategy, or guidance as to how risk assessment was to be carried out or linked to the URA's concerns about public perception. The court found that on two occasions the URA would have abandoned the clean-up had it received full and proper advice from Mott MacDonald.
On the question of damages, the court decided that the basis of assessing the URA's loss was to calculate a percentage of the overall remediation costs to be paid by Mott MacDonald on the grounds that they could not be recovered from the subsequent redevelopment, and that the URA lost the opportunity of abandoning the project at an early stage. The court considered that there was a 50% chance of recovering all expenditure, and that the URA were entitled to recover 50% of the costs in excess of the original estimates. This was roughly £18.5 million.
(ENDS Report 291, p25)
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