Assessing a water ingress claim before adjudication

We supported a specialist subcontractor considering adjudication over responsibility for water ingress on a modular building project. Our report tested the proposed case against the contract and available evidence, explained the risks of proceeding and set out a more measured route to pursuing recovery.

Background

The client faced extensive reinstatement work following water ingress and intended to seek an adjudicator’s decision on responsibility, with the financial assessment to follow. It attributed the damage to restricted access and problems with permanent roofing works carried out by others.

Several events had affected the same areas of the building. Before committing to proceedings, the client needed to understand both its contractual entitlement and the evidence required to distinguish the effects of each event.

Our approach

We began with a strengths and weaknesses audit of the client’s narrative, the subcontract and contemporaneous records. Two full-day workshops with the project team then allowed us to examine the six related issues in greater depth and identify what further information was needed.

We assessed notifications separately from responsibility for the damage. Using a chronology of awareness dates and notices, we checked the amended NEC4 compensation event requirements and whether each notification covered the relevant issue and location. Early warning records showed that problems had been raised, but did not necessarily satisfy the separate requirements for compensation event notification.

We then considered the allocation of responsibility against the scope, access arrangements, roofing information and correspondence. There were grounds supporting parts of the client’s position, but also credible arguments that its own responsibilities and actions had contributed to the damage. We explained those vulnerabilities alongside the stronger evidence.

Evidence that another party had contributed to water ingress did not, on its own, establish the full recovery the client was seeking. Late or incomplete notifications and overlapping causes created material risks for the proposed adjudication.

Our report recommended exploring negotiation before adjudication. It set out the work needed to support that route: a compensation event quotation covering time and cost, detailed cost records and an impacted programme, with technical input to allocate the effects of overlapping events. We also recommended continuing the insurance review and obtaining targeted legal advice on the amended subcontract provisions.

Outcome

We delivered a report setting out the client’s potential entitlement, the risks it needed to take into account and a practical strategy for pursuing recovery. Our advice was that adjudication at that stage carried considerable risk and should not be the immediate next step.

The client had a clear basis for considering the likely benefit and exposure of formal proceedings before committing further resources. The recommendation reflected what we considered to be in its commercial interests, including a candid explanation of the obstacles to the proposed referral.