Writs fly at Guy's

Exclusive by Michael Gordon



Project manager P&O Developments, Guy's Hospital and services engineer Austin Associates began legal proceedings last week to settle the long-running dispute about work carried out at the hospital.

P&O began the preliminary hearings, by issuing a summons against Guy's Hospital, in the Technology and Construction Court in London, last week. The hospital quickly reacted and issued a counter action against P&O including Austin Associates.

The claim and counter-claim are both believed to be multi-million pound law suits resulting from two years of disputes.

William Edgeley, managing director of P&O Developments, said: "This writ is in relation to the Guy's Hospital Phase III. The case is likely to be resolved in the first half of next year. We have entered preliminary hearings with a summons, but we can't discuss the situation any further.

"The National Audit Office report carries more information than we can disclose."

A spokeswoman for Judge Peter Bowsher QC, who is presiding over the case, said: "Originally when the writ was issued in November 1996, P&O was claiming for rectification of the project management values, and damages for breach of contract."

P&O is being represented by Speechly Bircham and Co, Guy's Hospital is represented by Rowe and Maw, and Austin Associates is represented by Berrymans, Lace and Mawer.

Gillian Birkby, partner with Rowe and Maw, said: "This is a counter-claim against the initial claim from P&O, for failure to adequately programme manage the project."

The NAO report into the delays and cost overruns on the redevelopment was careful not to apportion blame. The Phase III project finally reached completion in April last year - three years and four months late and £68.7 million over-budget.

The NAO report identifies problems from the outset, including a failure to freeze the design and significant design changes, delays to the building works, a large number of claims and disputes on site, changes to the design team's fee rates, inflation and the insolvency of a number of major works package contractors. The current litigation is centred on some of these matters.

P&O was appointed as the second external project management company for the main stage of construction in February 1991. This followed many attempts to mitigate the delays and deliver the building on time including the dismissal of the original project manager, Conspectus, which was terminated in February 1989 because the company "failed to deliver the required management control."

In June 1996, following deemed practical completion, the hospital trust gave three months' notice to terminate the contracts of P&O and Austin.

After considering the evidence, Judge Bowsher adjourned the hearing until next month.