Building Design Partnership Ltd v Standard Life Assurance Ltd

[2021] EWCA Civ 1793

LJ Coulson opened his judgment noting that:

“The use of sampling and extrapolation is not uncommon … (particularly the TCC) as a way of corralling evidence and keeping trials within proportionate limits. The essential proposition is that, if the sampled allegations are found, on the balance of probabilities, to be properly representative of the pool of allegations as a whole, then a detailed investigation into the sample can be extrapolated into a result in respect of the pool.”

Here, SLA’s had made a series of specific allegations arising out of a detailed investigation of 167 variations, and then extrapolated the results of that investigation across the remaining 3,437 variations, without investigating or pleading a detailed case in relation to them. BDP said this was an abuse of process and/or disclosed no reasonable grounds for bringing such a claim.

LJ Coulson said that it was not in issue that, in the right case, sampling and extrapolation was an appropriate tool by which the parties and the court can organise the evidence and try the issues in a proportionate way - although, he cautioned that such claims can be particularly difficult to establish. That said, the need to keep costs to a proportionate level would have meant that only some of the variations would themselves be fully explored. The question here was whether a claimant could, in effect, go back a step, and plead a claim at the outset on the basis of sampling and extrapolation. SLA said that it was legitimate to plead the sample in detail, identify the links between the sample and the pool of all the allegations, and explain how and why any findings on the sample would give rise to liability for the whole or part of the pool. Here, LJ Coulson noted that:

“In my view, the Extrapolated Claim is a proportionate way of addressing the 3,437 un-investigated variations. Like any other step taken to save costs, it may make the claim more difficult to establish at trial, but that is an inherent part of the trade-off which any claimant has to negotiate, between saving costs by not doing things which, if money were no object, it might have done, and maintaining a realistic prospect of ultimate success ...”

However, that would count for nothing if BDP did not know or understand the case they had to meet, or if the claim had no real prospect of success. The case here was not an action which raised novel points of law. It was a standard claim for damages for negligence and breach of contract, supported by detailed schedules. LJ Coulson considered that BDP were fully aware of the case they had to meet. They: “may not like it, and they may consider that it is likely to fail for many of the reasons they advanced … to this court, but there can be no doubt that they can understand … how it is advanced.”

For example, the 167 variations ranged across four major elements of the work. On SLA’s case, 83.1% of those variations gave rise to a claim of breach of contract and/or negligence against the design team. BDP were said to be responsible for the lion’s share of those variations. The allegations were concerned with late, inadequate, inaccurate, incomplete or uncoordinated information or over-certification. They were set out in “interminable detail.” LJ Coulson also confirmed that there was nothing special or different about professional negligence actions which would mean that extrapolated claims could never be pleaded as part of such claims. Whilst, the Judge disagreed with SLA that the sheer number of CAIs and CVIs was itself demonstrative of negligence, (there may be reasons why there were so many that did not reflect on the design team at all), but that did not matter: 

“There was nothing on their face to distinguish the variations which are the subject of schedules 1-4, with the variations which are not, save that the former have been thoroughly investigated and the latter have not. They were all issued by the same people, on the same project, in the same circumstances, namely an atmosphere of increasing costs and widespread concern about the control of the process. Thus the inference which [SLA] seek to draw about responsibility for the variations as a whole is at least reasonably arguable.”

LJ Coulson also disagreed with the suggestion that this decision would “open the floodgates”:

“The days of the court requiring parties in detailed commercial and construction cases to plead out everything to the nth degree are over. It is not sensible; it is not cost-effective; it is not proportionate. The parties, with the assistance of the court if they cannot agree, are duty bound to find a way of trying out the principal issues between them in a sensible and proportionate way … Pleading out every last detail at the outset of the proceedings should not be regarded as the paradigm method of framing such disputes, particularly if there are more proportionate alternatives which still enable the defendant to know the case that it has to meet.”

LJ Birss agreed: 

“The variations on which the extrapolation was based were not a random sample. They were the higher value variations. The case was not advanced on the basis that the extrapolation was supported by statistical confidence or random sampling, rather the inference was put on a wider basis … Statistics may, in a proper case, add weight to a case based on extrapolation, just as the absence of statistical rigour may weaken it, but there is no general rule that the only extrapolation which can be permitted must be statistical in nature.”

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