Construction: project managers’ liability caps and the need to consider them carefully

The Technology and Construction Court case Ampleforth Abbey Trust v Turner & Townsend Project Management Ltd [2012] EWHC 2137 (TCC) highlights the need for project managers to consider caps on liability very carefully, for setting the level too low may well prevent them from relying on the limitation clause in their appointment.

Between 2000 and 2005, the trustees of Ampleforth Abbey Trust engaged Turner and Townsend Project Management (T&T) as project manager on three construction projects relating to the provision of new boarding accommodation for girls at Ampleforth College. This case relates to the third of those projects, on which Kier Regional was engaged as building contractor.

The trust was keen for construction to commence as soon as possible, but various outstanding issues prevented a construction agreement from being entered into before work began, and on the advice of T&T the trust entered into a letter of intent with Kier. For a variety of reasons, the construction agreement was not entered into prior to the works’ completion; instead, a new letter of intent was issued as the previous one expired and a total of eight letters had been entered into by the time the works were complete…

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