Willmott Dixon fails to claim compensation from council

Willmott Dixon has failed in its bid to get compensation from Wolverhampton council for project delays.

The contractor had claimed it was owed money in relation to a £48.1m job renovating Civic Halls in Wolverhampton. Willmott Dixon scooped the job back in September 2019 via its spot on the Scape National Construction Framework.

Under the terms of the contract signed with City of Wolverhampton Council, Willmott Dixon could claim additional compensation if the council asked it to carry out more work or if it experienced delays due to unforeseeable events, according to council chief operating officer David Pattison.

The contractor disagreed with mediation undertaken by project manager Faithful & Gould and took the dispute to adjudication. Faithful & Gould previously ruled that Willmott Dixon had experienced a 45-week delay due to the coronavirus pandemic and design changes.

But in a report written for the council’s audit and risk committee, Pattinson said Willmott Dixon was seeking compensation for 73 weeks of delay. Willmott Dixon also claimed its payment for overhead costs relating to its “working area” should be doubled due to increased costs, according to the report.

But an adjudicator has ruled Willmott Dixon was not entitled to anything in relation to the increased overhead costs and said the firm should only be compensated for 45-and-a-half weeks of delay.

Willmott Dixon could still refer the adjudicator’s decision to the High Court, in which case the council would “continue to robustly defend its position and the public purse”, said Pattinson.

A spokesperson for Willmott Dixon hinted the company would continue to seek compensation.

They said: “When the previous contractor on the Civic Halls project went into administration, we were invited to step in and take forward the venue’s complex refurbishment. Our team of specialists have worked very hard to help get the project to a point where the Wolves Civic will open this summer as a fantastic entertainment and cultural venue that, as well as attracting some of the world’s most popular artists, will also drive footfall and economic growth in the heart of Wolverhampton.

“While we are disappointed by the recent adjudication opinion, we remain incredibly proud of what we have delivered and the lasting legacy it will provide to the future of Wolverhampton. We will of course continue to seek an equitable outcome with our customer.”

Pattinson, meanwhile, suggested the council would seek to recoup some costs from Willmott Dixon, saying that it was in a “good place to recover the additional pain and gain monies paid to [Willmott Dixon]”. The council has so far paid out an additional £10m in relation to the claims by Willmott Dixon, according to the report.

He added that the council had outlined a number of lessons learned from the period, saying that in future the authority would have a “much more detailed and vigorous approach to public project assurance”, and that there would be “much greater emphasis” on internal audit.

The chair of the council’s audit and risk committee, councillor Craig Collingswood said: “[The judgement] clearly demonstrates the council’s ongoing commitment to ensuring the best value for money and protecting the public purse. It is great that the completion of the refurbishment will take place within the agreed current budget.”