Question 1

What is Adjudication (Construction)?

Accepted Answer

A statutory dispute resolution process under the Housing Grants, Construction and Regeneration Act 1996, providing a binding decision within approximately 28 days. Construction quantum experts frequently provide decision-ready schedules and oral submissions in adjudication, where time constraints require focused, evidenced loss quantification rather than full CPR-style reports.

Question 2

What is Allied Maples Principle (Loss of Chance)?

Accepted Answer

From Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602: where a defendant's negligence deprives the claimant of the chance to obtain a benefit from a third party, damages reflect the value of the chance lost, expressed as a percentage probability multiplied by the full benefit. Central to solicitor negligence and professional negligence loss quantification.

Question 3

What is But-For Analysis?

Accepted Answer

The counterfactual methodology comparing the claimant's actual financial position after breach with the position they would have been in had the contract been performed. The difference, after deducting avoided variable costs and crediting mitigation, represents lost profits or the financial impact of breach. The standard approach to expectation damages quantification.

Question 4

What is Cavendish Square Rule (Penalty Clauses)?

Accepted Answer

From Cavendish Square Holding BV v Makdessi [2015] UKSC 67: the modern test for whether a contractual clause is an unenforceable penalty. A clause is penal if it imposes a detriment out of all proportion to any legitimate interest of the innocent party. Relevant where defendants argue claimed losses are pre-estimated liquidated damages or penalty clauses.

Question 5

What is Causation?

Accepted Answer

The requirement that the breach was an effective cause of the loss claimed. In contract, the 'but for' test applies: but for the breach, would the loss have occurred? Where multiple causes contribute, the expert must apportion loss attributable to the defendant's breach separately from external market factors or the claimant's own conduct.

Question 6

What is Commercial Agents Regulations 1993?

Accepted Answer

The Commercial Agents (Council Directive) Regulations 1993, which provide compensation or indemnity rights to commercial agents on termination of agency agreements. Regulation 17 compensation is typically calculated based on the value of the agency, often two years' average annual commission, requiring expert quantification of commission history and goodwill.

Question 7

What is Consequential Loss?

Accepted Answer

Loss beyond the direct loss of bargain, additional losses flowing from the breach, such as third-party contract losses or business disruption costs. Recoverable only if within Hadley v Baxendale remoteness: either arising naturally from the breach or within the parties' reasonable contemplation at contracting.

Question 8

What is CPR Part 35?

Accepted Answer

Civil Procedure Rules Part 35 and Practice Direction 35 govern expert evidence in civil proceedings in England and Wales. Experts owe an overriding duty to the court, must provide independent objective opinions within their expertise, and must comply with specific report format requirements. Non-compliance can result in exclusion of evidence or adverse costs.

Question 9

What is Diminution in Value?

Accepted Answer

A measure of damages based on the reduction in the value of an asset caused by the breach, rather than lost profits. Common in property and share valuation disputes, and professional negligence claims where a negligent valuation caused the claimant to overpay for an asset.

Question 10

What is Disruption (Construction)?

Accepted Answer

Loss of productivity in construction works caused by events such as variations, crowding, or out-of-sequence working, distinct from prolongation. Quantified by comparing planned labour productivity with actual productivity, using techniques such as measured mile analysis. Requires specific causal evidence; global disruption claims are vulnerable to challenge.

Question 11

What is Duty to Mitigate?

Accepted Answer

The claimant's obligation to take reasonable steps to minimise loss following breach. Failure to mitigate reduces recoverable damages. Expert witnesses assess what mitigation steps were available, whether they were taken, and the financial value of loss that proper mitigation would have avoided.

Question 12

What is Earn-Out Agreement?

Accepted Answer

A contractual mechanism in M&A transactions where part of the purchase price is contingent on post-completion performance targets. Disputes arise when sellers allege buyer conduct frustrated earn-out achievement. Experts construct but-for models showing what performance would have been achieved absent alleged breach.

Question 13

What is Expectation Damages?

Accepted Answer

Damages that place the claimant in the position they would have been in had the contract been performed, the primary measure of contract damages per Robinson v Harman [1848]. Typically quantified as lost profits using but-for analysis. Also called expectation loss or benefit of the bargain damages.

Question 14

What is FIDIC Contract?

Accepted Answer

Fédération Internationale des Ingénieurs-Conseils standard form construction contracts widely used on international infrastructure projects. FIDIC claims require strict compliance with notice and substantiation requirements under Clause 20. Quantum experts must work from the actual amended contract and applicable delay and cost mechanisms.

Question 15

What is Force Majeure?

Accepted Answer

A contractual clause excusing performance where specified supervening events beyond the parties' control prevent performance. Force majeure is a contractual construct, not a free-standing common law doctrine under English law. Quantum experts may address whether an FM event caused the loss claimed and what proportion of loss is attributable to FM versus breach.

Question 16

What is Hadley v Baxendale [1854]?

Accepted Answer

The foundational authority on remoteness of damages for breach of contract. The two-limb rule limits recovery to: (1) losses arising naturally from the breach; and (2) losses within the reasonable contemplation of both parties at contracting as the probable result of breach. Expert reports should address remoteness for each head of loss.

Question 17

What is The Ikarian Reefer Duties?

Accepted Answer

From National Justice Compania Naviera SA v Prudential Assurance Co Ltd (The Ikarian Reefer) [1993] 2 Lloyd's Rep 68: the expert's primary duty is to the court, not the instructing party. The expert must provide independent, objective assistance, consider all material facts including those unfavourable to the instructing party, and clearly distinguish fact from opinion.

Question 18

What is JCT Contract?

Accepted Answer

Joint Contracts Tribunal standard form building contracts widely used in construction. JCT contracts link extension of time and loss and expense entitlement through relevant events and relevant matters, with strict notice requirements. Quantum experts must analyse entitlement under the specific JCT form and amendment schedule used.

Question 19

What is Joint Statement (Expert Witnesses)?

Accepted Answer

A document produced after a meeting between opposing experts under CPR Part 35, recording areas of agreement and disagreement. Joint statements narrow trial issues and are typically ordered by the court. Experts must not reach inappropriate compromises on opinion, disagreements should be clearly and precisely stated.

Question 20

What is Loss and Expense (Construction)?

Accepted Answer

The JCT term for financial compensation due to the contractor for direct loss and/or expense caused by employer risk events. Distinct from damages at common law, entitlement arises from the contract. Quantum experts quantify loss and expense items that are contractually entitled and properly notified.

Question 21

What is Loss of Chance?

Accepted Answer

Damages for the loss of an opportunity where the outcome depended on a third party's actions. Quantified as a percentage probability of success multiplied by the value of the benefit. Common in professional negligence claims following Allied Maples. The expert must support the probability assessment with evidence, not speculation.

Question 22

What is NEC Contract?

Accepted Answer

New Engineering Contract suite (NEC4) promoting collaborative project management with compensation events as the primary mechanism for time and cost entitlement. Uses defined cost and forecast defined cost rather than JCT loss and expense terminology. Quantum experts must apply NEC-specific assessment procedures.

Question 23

What is Party-Appointed Expert (PAE)?

Accepted Answer

An expert witness instructed by one party to the litigation, as opposed to a Single Joint Expert appointed by the court for both parties. PAEs owe the same CPR Part 35 duty to the court as SJEs. In high-value commercial disputes, each party typically appoints their own quantum expert, with a joint meeting to narrow issues.

Question 24

What is Prolongation (Construction)?

Accepted Answer

Additional costs incurred when a construction project is delayed beyond the planned completion date, extended site overheads, preliminaries, plant hire, and supervision. Linked to the delay analysis establishing the period of excusable delay. Distinct from disruption, which addresses loss of productivity.

Question 25

What is Quantum?

Accepted Answer

The amount of money claimed or awarded as damages. In construction disputes, a 'quantum expert' is a chartered quantity surveyor or forensic accountant who values the financial consequences of entitlement events. In commercial litigation, quantum experts quantify lost profits, wasted expenditure, and consequential loss.

Question 26

What is Reliance Loss?

Accepted Answer

Damages that return the claimant to the position they would have been in had the contract never been made, typically quantified as wasted expenditure incurred in reliance on the contract. An alternative to expectation damages, subject to the bad bargain defence. Governed by authorities including Anglia Television Ltd v Reed [1972].

Question 27

What is Remoteness?

Accepted Answer

The legal limit on recoverable damages, losses must satisfy the Hadley v Baxendale test. Losses too remote are not recoverable regardless of their size. Expert witnesses structure reports to address remoteness for each head of loss, separating direct from consequential categories and identifying the supporting limb.

Question 28

What is Robinson v Harman [1848]?

Accepted Answer

The foundational compensatory principle: the innocent party should be placed in the position they would have been in had the contract been performed. This establishes expectation damages as the primary measure of contract damages under English contract law, quantified through but-for analysis of lost profits.

Question 29

What is SAAMCo Principle?

Accepted Answer

From South Australia Asset Management Corp v York Montague Ltd [1997] AC 191: damages for professional negligence are limited to losses within the scope of the professional's duty. Distinguishes 'advice' cases (full transaction losses may be recoverable) from 'information' cases (only losses caused by the specific misinformation). Essential in accountant and valuer negligence claims.

Question 30

What is Scott Schedule?

Accepted Answer

A structured document used in construction litigation (named after Scott v Davis [2000] BLR 301) listing each claim item with amounts claimed, responding positions, and expert opinions. Courts in the Technology and Construction Court frequently order Scott Schedules to narrow issues before trial.

Contract Loss Expert Witness Glossary

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