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After numerous adjudications and three trials, the litigation over the M6 toll road reached the Court of Appeal in June. The parties were the Midland Expressway and CAMBBA, a joint venture between Carillon, Alfred McAlpine, Balfour Beatty and Amec.

A few eyebrows have been raised by the fact that of all the complicated issues being tried, it was a dispute over the apparently simple issue of provisional sums that tested the minds of the appeal judges.

As is common in construction projects, the contract between the parties provided for provisional sums. A provisional sum is used to refer to work whose content is undefined or for work that may not be carried out. The provisional sums agreed in this case amounted to 拢2m.

Later Midland Expressway, the employer, certified payments totalling 拢2.8m. Both parties accepted that the sums certified should be added to the contract price of 拢485m. However, CAMBBA claimed that the 拢2m provisional sum should not be deducted from the contract price. Midland Expressway, arguably adopting accepted industry practice, claimed that it should be. After all, that was the whole point of provisional sums 鈥� you deduct the notional value and add in the actual cost.

The legal headache was caused by the way that the contract said the cost was to be added to the contract price when the employer issued an instruction to execute work or expend a provisional sum. However, there was no mirror provision adjusting the contract price downwards by deducting the provisional sum itself.

Interestingly, the employer does not appear to have raised a rectification argument 鈥� that this failure to record the deduction of the provisional amount meant that the contract as drafted failed to record the parties鈥� true intentions 鈥� in any of the court hearings.

CAMBBA maintained that, as a consequence of the contract鈥檚 explicit wording, it was entitled to be paid both the original provisional sum of 拢2m as well as the actual value of the work executed and tax paid. In other words, the express words of the contract entitled it to be paid twice for the same work.

A situation where a party can withdraw a claim from adjudication is surely open to abuse

Although the argument may have been contrary to the 鈥渘ormal鈥� treatment of provisional sums, CAMBBA鈥檚 argument reflected exactly what was said in a detailed, lengthy and (no doubt) heavily-negotiated contract.

The adjudicator, a leading construction QC, while finding the arguments finely balanced, agreed with CAMBBA. No amount of interpretation could make the contract mean what it did not.

However, in the Technology and Construction Court, Mr Justice Jackson decided that the adjudicator was wrong: the provisional sums were to be deducted from the contract price and CAMBBA鈥檚 construction of the contract did not make commercial sense.

CAMBBA decided to appeal. The case was heard by Lord Justice May, one of a small number of appellate judges to have practised at the construction bar. He noted that the term 鈥減rovisional sum鈥� is so widely understood in the industry that it was 鈥渃lose to a term of art鈥�, but he said its precise meaning and effect depended on the terms of the individual contract.

Lord Justice May said Mr Justice Jackson鈥檚 conclusion in Midland Expressway鈥檚 favour was 鈥済enerally persuasive鈥�, although he said the judge did not address 鈥渉ead on鈥� CAMMBA鈥檚 submissions that the wording of the contract did not require the provisional sum to be deducted from the contract price.

He noted that if the contract had stated that provisional sums were to be deducted it would have 鈥渟aved a lot of lawyer鈥檚 fees鈥�, but he dismissed CAMBBA鈥檚 appeal because of an essential point in the contract. This stated that provisional sums were there to be used (or not) in accordance with the employer鈥檚 instructions for the works. Therefore, by definition, they were only payable at all if and to the extent that the employer so instructed.