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Sun June 13 2021

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Lessons from Walter Lilly

16 Jun 13 One year on, the lively case of Walter Lilly versus Mackay may not be quite the precedent that the construction industry had hoped.

Giles Mackay
Giles Mackay

The legal tussle between millionaire barrister/property developer Giles Mackay and contractor Walter Lilly & Co made headlines last year, fuelled in part by Mr Mackay’s colourfully abusive language. The judge described him as “combative, bullying and aggressive".

Mr Mackay hired Walter Lilly to help build his dream family home in London back in 2004. All was smooth sailing until major delays ensued. Blame was thrown around between the parties and the relationship turned sour. With no single party clearly to blame, the issue of culpability reared its head. The court case that followed was one of the lengthiest and most expensive of its kind.

Eventually the verdict in favour of Walter Lilly was a victory for those in construction, a win both for common sense and the letter of the law. The contractor was awarded £2.3m damages for sums wrongly deducted for alleged defects, loss and expense related to delay and outstanding unpaid value of works.

However, there are lessons that the industry should heed, lest they find themselves in a similar legal wrangle.

  1. Keep a record

In the case of Walter Lilly / Mackay, there was a lack of precise records detailing where (and with whom) concurrent delay lay. As a result, the contract became impossible to settle amicably. Unsurprisingly, this had a knock-on effect for the length of the case itself as Mr Justice Akenhead tried to unscramble the events that had taken place and where the blame lay. 

Given this, it is not difficult to see the worth of maintaining excellent site records from the beginning – for both the contractor and the client. It is essential that any disruptions and delays put forward to the court are completely justified as the judge can disagree with any aspect they feel is not sufficiently supported. Keeping a clear and detailed timeline of events can minimise time and costs later down the line, helping contractors to present a water-tight case, missing no opportunity for apportionment. 

On top of this, be clear on exactly what the contract states regarding extension of time from the beginning. It is imperative that you understand where you stand from day one.

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A lack of records in the Walter Lilly / Mackay case meant that, to some degree, common sense and logical reasoning had to take over in order to decipher the cause of delays. For those facing a similar predicament today, following a few simple steps can help construction companies avoid any future misunderstandings.

  1. Get a good expert

Good expert advice will make or break you. Avoid diving head-first into automated project management tools that often don’t offer sufficient support and advice. Equally, knowing that you’ve selected an advisor you can rely on is critical and research is essential when it comes to finding the right expert. Be it a team or an individual, take time to look into their specialist areas of expertise – it will provide reassurance that they will be able to get under the skin of your business.

Pinpoint exactly what type of advice you need. There are a multitude of advisors out there but try to separate those who can genuinely help from those trying to shoehorn their solution to your problem. Don’t underestimate the value of face to face meetings. It is important to spend time with potential advisors to ensure that the chemistry is right from the outset – the chances are you may be working alongside each other for a considerable amount of time.

  1. Each case is unique

The Walter Lilly v Mackay case created such a buzz because almost every aspect of it was unusual – a loss of perspective, a string of blown up media headlines and a constant rotation of architects, advisors and project managers that kept adding to the complexity.

The circumstances around the case make it unlikely that construction companies today will face the same scenario. As such, it is important to be realistic and not to rely on the case’s verdict as a precedent for the future.

With close to 700 paragraphs of judgement, it is easy to turn to the Walter Lilly v Mackay verdict and draw on excerpts to support one’s own argument. Its sheer volume means that there is likely to be something in there for everybody. But, as tempting as this may be, it is imperative to apply context and look at each case afresh. Even if there are genuine similarities between your case and another, it is wiser to approach the argument from scratch rather than slicing and dicing out-of-context references from past rulings. Adhering to points 1 and 2 above may also mean you don’t have to rely on precedence to prove your case.

This article was supplied by law firm Watson Burton and edited by The Construction Index

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