Premier Engineering (Lincoln) Ltd v MW High Tech Projects UK Ltd  EWHC 2484 (TCC)
This English case provides useful guidance regarding two evidentiary issues which often arise for construction law practitioners:
- the handling of time sheet evidence for the purpose of calculating and valuing work done, and
- assessment by a court of large numbers of disputed invoices in an efficient manner, by ‘sampling’.
Facts and Decision
MW engaged Premier to provide steelwork on the construction of an energy-from-waste facility. MW then engaged Premier to also take over another subcontractor’s work. However, Premier was not provided a fresh sub-contract, or given a defined scope. Instead, it was to provide labour at hourly rates and materials, as may be directed from time to time.
In the proceeding, Premier claimed that £1.3m remained owing to it for unpaid hours, together with plant and equipment. A significant issue before the court was the assessment of Premier’s timesheets, which it relied upon to substantiate the work it said was performed. MW submitted that the timesheet signing process was unreliable proof of actual work done, as it was nothing more than “rubber stamping”, without any meaningful checking. The court awarded Premier £615,500.09.
The court found that under the terms of its engagement of Premier, MW essentially directed Premier’s labour force. This was accepted as a reasonable explanation for why Premier did not maintain detailed records of what activities its labour force was carrying out day-to-day.
The court made the following observations about timesheet evidence:
- There were inherent risks in relying solely on timesheets prepared by a subcontractor, as they are not always accurate. However, the timesheets had been signed by MW’s site representative, which process is the ‘first line of protection against errors and inflated claims’ (at ).
- Parties’ signatures on the timesheets indicated their honest belief as to the value of the work done and the sum due for it. The signing of the timesheets by parties should be done on a timely basis so as to permit ‘contemporaneous assessment by the payer with current knowledge of the work completed’.
- The status of signed timesheets as primary evidence should not be downgraded because of the asserted cavalier approach to the signing process by MW (at  and ).
- Notwithstanding that the timesheets contained a clause that any payments were being made ‘on account and subject to final checks’, such a clause would only provide protection to MW where ‘final checks’ revealed new facts or matters that cast doubt on any interim valuation (at ).
The court found that, in some cases, timesheet evidence might require other contemporaneous evidence to verify its accuracy or to establish a claim in the absence of timesheets, such as: records from turnstiles installed at the entrance to a construction site which recorded arrival and exit times of workers, and biometric clock data which tracked the signing in and out of workers (at ). Further, in some cases, workers might give useful evidence about what they were doing on site. However, such “recollection” evidence given well after the fact was inferior to objective data recorded contemporaneously
High Volume Invoice Evidence
Because of the large number of invoices involved, the court said that examining each and every one of the challenged invoices would be a disproportionate use of the court’s limited resources.
Instead, the court adopted a broad brush sampling approach after conducting a general survey (at ), and engaged in comparisons of a sample undisputed paid invoice with the largest disputed invoice claimed in the proceeding in order to assess the legitimacy of MW’s objections reach an overall assessment of the extent to which, if at all, a reduction should be made to Premier’s plant and materials invoices. (For a discussion of proof by sampling, see Dr Richard Manly, “Permitting ‘Proof by representative sample’ can assist the court and the arbitrator” (2021) 40(2) the Arbitrator and Mediator 1, and “A postscript” (2022) 41(1) the Arbitrator and Mediator 38).
The case demonstrates the importance of reliable contemporaneous records and is a useful insight into the Court’s likely treatment of such evidence. Contemporaneous records will be preferred to other forms of evidence in matters involving factual disputes about work done during a project, and are fundamental in substantiating the veracity of a claimant’s quantum.
For an Australian discussion of contemporaneous site record evidence, practitioners should see also DM Drainage and Constructions Pty Ltd v Karara Mining Ltd (No. 6)  WASC 410, - where Vaughan J discusses his approach to the contemporaneous documents evidence presented in a 50 day trial including daily job sheets, accommodation records, site access requests, records of machine hours from service meters attached to earth moving equipment and daily activity reports.
Dr Richard Manly KC and Jennika Anthony-Shaw
Liability limited by a scheme approved under professional standards legislation