No client litigation, claims YJL

by John Leitch



YJL Construction, now with an annual turnover of £440m a year following the acquisition of Allenbuild, differs from other major contractors by not having a single piece of litigation with its numerous clients, said chief executive Roger Feast this week.

"We do it by being honest," said Feast, whose company rule is that someone within the firm must go to the client and talk things through whenever there is a working problem. "We don't allow things to fester. We've had regular internal seminars to pose and answer the question 'how can you be sure that the client knows what his final cost will be?'. The drive at YJL is for upfront honesty and to see it expressed early on.

"It's not good enough to deal with the client's PQSs as they sometimes have their own positions to protect. Someone senior here must speak to the client. There have been cases where he was planning changes and, by spelling out to him the final cost, he's said that he'll revert back to his original plan."

YJL's litigation-free status includes a total absence of either adjudication or arbitration as well as full-blooded litigation. "There's no point in getting a third party to do the negotiating on our behalf," said Feast. "After all, we know the process and we're the best ones to do the talking."

The construction business has eight divisions, including Bullock, Walter Lilly, David Lodge, Hatchpaines and Britannia. The two new divisions are YJL London, a fit-out specialist, and YJL Facilities, a facilities management player.

Average contract sizes have steadily risen over the past 12 months. The largest schemes are undertaken by YJL where the upper limit is £40m and the smallest project to attract attention would be £3.5m - though potential work below this threshold could be steered towards either Allenbuild or Walter Lilly.

Two years ago, £25m was YJL's upper limit, but since then it has tackled three schemes bigger than that. "They've given us confidence," said Feast. "But beyond £40m you're talking of taking on higher risk. I'm not interested in forming joint ventures to step into even larger projects as I don't think a jv is a good way of working. So we turn such schemes down."

Feast anticipates YJL Facilities, one of the two new divisions, will grow to an annual turnover of £5m to £6m in two years' time. "It's not going to be a headlong rush," said Feast, "and we're not going to become a services-related player.

"We went to the market looking to buy a facilities company but couldn't find the right one. So we then looked for the right individual to build our own. We found the right man in Malcolm Frost, previously operations director with Amec Facilities."

YJL used headhunters to get Frost on board. A similar strategy resulted in YJL tempting Nigel Wilson, managing director of Balfour Beatty Refurbishment, to jump ship and head up YJL London, the second division the group has set up in recent months. Its territory covers fit-out and refurbishment and Feast hopes to build up a £10m-a-year turnover within two years.