Evidential value of timesheets

It is commonplace in the construction and engineering industries for there to be a requirement to keep records of time and materials spent on certain aspects of the work in justification for the contractor's entitlement to be paid.
This requirement will obviously arise on time- and material-based contracts, but may also arise where, as an element of the evaluation process under a lump sum contract, a fair evaluation has to be made of ordered variations or loss and expense incurred by the contractor. Disputes will inevitably occur where the parties fail to maintain a proper system of record keeping and a joint protocol for agreeing the time and materials expended by the contractor as the work progresses.
The recent case of JDM Accord -v- The Secretary of State for the Environment, Food and Rural Affairs (DEFRA) examined the evidential value of daywork sheets maintained by the contractor in accordance with the contract to support payment claims, in circumstances where the employer had failed to verify and approve those daywork sheets at the time that the work was being carried out.
The dispute arose out of claims for works carried out by JDM relating to cleaning and disease suppression at a large number of locations throughout the UK during the foot and mouth epidemic in 2001. At the height of the foot and mouth crisis more than 10,000 vets, soldiers, field and support staff, and many thousands working for contractors, were engaged in fighting, eradicating and preventing further outbreaks of the disease. The work involved the slaughter of animals, the preparation of burial sites for the disposal of animal carcasses and the construction of the necessary infrastructure to support those sites.
The first outbreak of the disease was confirmed in February 2001 at an abattoir in Essex. The outbreak lasted for 32 weeks and by the time that it had been finally eradicated in September 2001, six million animals had been slaughtered and 2,000 premises, spread through 44 counties, had been infected. The cost of the consequent clean up and disposal operations, compensation payments and other direct costs and losses was estimated at more than £3bn to the public sector and more than £5bn to the private sector.
JDM's claim, totalling in excess of £5m, arose out of extensive work carried out by it in 2001 on more than 160 different sites in the south-west of England and in Wales. The size of the operations carried out by JDM can be gauged from the fact that it had already been paid in excess of £32m and the timescale over which all of its work was carried out was between March and December 2001. JDM was one of over 1,200 contractors engaged upon similar works.
Initially DEFRA had entered into an agreement with JDM, in similar terms to many other contractors, in which it was anticipated that DEFRA would have a nominated representative based permanently on each site who would record the times and activities carried out by each employee and each item of plant engaged by JDM. A timesheet would be signed each day by that representative and a nominated employee of JDM.
However, despite having national contingency plans in place, it is clear that the 2001 outbreak was of such unprecedented severity that its extent and seriousness was not foreseen. Overwhelmed by the scale of the spread of the disease, many sites had no DEFRA representative, and on most sites no timesheets were verified or authenticated by a DEFRA representative.
The verification procedure was clearly intended to preclude disputes as to the number of chargeable hours actually performed. Although jointly signed timesheets would not amount to conclusive evidence of JDM's entitlement to payment for the particular number of chargeable hours recorded on any timesheet, DEFRA would only be able to challenge the content of the timesheets for payment purposes to the extent that it could later produce evidence to show that an inaccuracy or error had occurred.
In other words, had DEFRA properly verified and countersigned the timesheets at the time they were submitted, the parties would have been bound to proceed on the basis that the recorded chargeable hours correctly represented the number of chargeable hours for which JDM was entitled to payment.
By failing to verify and sign the timesheets, DEFRA was in breach of contract. Judge Thornton QC took the view that it would be wrong to allow DEFRA to take advantage of its breach of contract such that it could make a more extensive challenge to the timesheets than it could have done following their verification.
Having failed to challenge the timesheets at the time of their submittal, DEFRA now carried the evidential burden of showing that the contents of the timesheets were inaccurate.
In practical terms, since there were no other records made, DEFRA would be restricted in its attack on the timesheets to showing that they contained arithmetical or other patent errors, that they were subject to some general error, such as not allowing for deductible meal breaks, or were fraudulently produced such that no weight could be placed upon them.
In conclusion, Judge Thornton was satisfied that the timesheets should stand, without further proof, as accurate and reliable evidence of the number of chargeable hours worked by JDM. This would only be capable of being discounted if DEFRA produced significant credible evidence as to how or why a particular group of timesheets were to be considered inaccurate.