National Museums and Galleries on Merseyside v AEW Architects and Designers Ltd

This judgment addresses quantum relating to the ceilings claims and some residual quantum matters. I handed down judgment on all other matters on 31 July 2013. I will not reiterate the facts or the history, although I will as necessary add to those made in the first judgment.

Out of the scores of different heads of quantum, while well over 40 remain in issue, a significant number have been agreed as figures by the experts. I accept and adopt the agreed figures which I set out below, with the item numbers, descriptions and amounts taken from the Quantum Experts’ Third Joint Statement:

This part of this judgment relates to costs incurred by the Museum arising out of and in connection with the collapse of the SAS ceilings in the period leading up to Practical Completion and the official opening of the Museum in the summer of 2011. It is necessary first to identify what the state of affairs was immediately before the ceiling collapse and what had to be done following the collapse to try to keep to the opening date.

Partial possession (essentially of the interior of the Museum) was granted on 8 February 2010 whereupon the exhibition fitting out works started. A firm called Patton Heritage was in charge of managing these works. There was a very extensive amount of work to be done and it is clear for instance from photographs that elaborate lighting arrangements and sophisticated display cabinets were to be installed as well as educational and catering facilities.

On 25 May 2011, there were a very large number of organisations and people working on the site such as Reid Engineering, Paragon Creative, Sysco Systems, Leach Colour, various consultants in relation to the construction of the Museum Building and numerous Museum curatorial team members as well as Museum security staff.

At 12.45 pm on 25 May 2011, whilst works were being carried out in a number of the galleries, the ceiling in the "Wonderous Place Gallery" collapsed. Work was being carried out at a high level in the area and one other work person was working nearby at ground level albeit not directly below the area of the high level works. That other person who worked for Leach Colour was hit by one of these ceiling tiles and sustained head and neck injuries; he had to be taken to hospital. The Construction Manager immediately stopped all work in the area and evacuated the gallery. A site inspection was arranged to ascertain the nature and cause of the damage and the incident was later reported to the Health and Safety Executive. On 27 May 2011, the Museum arranged for an expert architect from Bickerdike Allen & Partners to inspect; following its inspection, it recommended that the remaining sections of the ceiling should be removed as should the same ceiling system installed elsewhere.

Up to the time of the collapse, the exhibition set-up works were being scheduled in accordance with the Construction Manager’s programme of works which had been issued on 18 April 2011 with a view to achieving the agreed partial opening date for the Museum on 19 July 2011; this date was broadly immutable because the Museum had been marketing this opening date through press releases and the like. This date related to Phases 1 and 2 with Phase 3 being 30 November 2011 with the planned royal opening on 2 December 2012.

The Museum, reasonably, felt that it had no choice but to do all that was necessary to ensure that this earlier opening date could be maintained. To this end, there had to be a re-programming exercise carried out which had to compress the time available to carry out the work on site to overcome the delay and disruption necessarily caused by the collapse and the removal of the relevant ceilings. This led broadly to substantial out of hours and night working for both the contractors involved as well as Museum staff. Broadly therefore, the costs involved relate to making the areas safe and the costs of accelerating the remaining works.

Apart from the physical work involved in making the site safe, a number of other things happened. The firm, Haley Sharp Design, was asked to inspect the Wondrous Place Gallery and report on the damage caused to exhibits attributable to the ceiling collapsing. The Museum’s Project Director and others went on to working 12 hour shifts and some seven-day working to ensure that the Museum had senior management present on-site. There was extensive liaison by the Museum Project Co-ordination Team working with the Construction Manager in reviewing areas of damage to displays including graphics, models, set works, AV hardware items and the impact of these events on the installation programme. There had to be substantial liaison with the various contractors and the Construction Manager. Curators had to carry out assessments of displayed objects and areas, which were considered as priority areas for protection and needed to be identified such as a treasured glass map, Tyson Smith sculptures and a Grand National model horse (for example). Consideration had to be given to reviewing storage facilities and to identifying available storage spaces for items that needed to be taken off display. Various display cabinets and structures had to be moved to enable the work to the gallery ceilings to be done. Mr Batchelor's firm Exhibition Projects Ltd’s contract was extended.

The works carried out in the period prior to the first and royal openings involved not only the removal of the ceilings in question but also measures to make the remaining electrical installation and fittings robust and safe. The physical damage had to be rectified and, as Ms Granville said in unchallenged evidence, the trade contractors all had more or less to double their working resource to make up for the time lost and for remedial works to the damaged exhibitions and areas. She explained (and I accept) that staff worked on an overtime basis as it was not possible to bring in new people from outside the organisation at that critical juncture. The Museum was in the process of installing around 6,000 objects in the exhibitions and many of the layouts and display arrangements were complex.

As she has said, these temporary remedial measures cost nearly half a million pounds and had to be funded from the project budget itself with the result that savings had to be found from within the exhibition budget. As she graphically said, by the time that the later phase of galleries and the theatre was opened in December 2011, the public got half a million pounds less exhibition by reason of the ceiling failure.

I have no doubt (and it has not been seriously challenged) that the measures which the Museum took in terms of paying overtime, additional fees to consultants, repair works, temporary works and acceleration were broadly reasonable and sensible.

I therefore now turn to consider the 18 items which remain in dispute. As will be apparent, I formed the view that Mr Matthews was taking a blinkered and non-commercial approach on many items when it must have been obvious to him that there was bound to have been significant loss where he has allowed either nothing or a substantially reduced amount.

Mr Fitch endorses a figure of £31,074.64 and Mr Matthews’ figure is £25,894.64. There is no real dispute that these works were done. Mr Matthews identified in evidence that the dispute was whether the sum had been paid by the Museum but he then confused matters by suggesting that the full amount may have been paid but perhaps the difference should not have been paid; he accepts that there is clear evidence that the work was done. There is evidence that the full figure was paid. Mr Matthews’ real complaint is that fixers of high-level “unistrut” pieces in the ceiling were charged out at £60 per hour and that the Patton supervisor was charged at 1.5 times his day rate for having to work at night. Dealing with the latter point first, Patton charged their supervisor at £240 per day but charged, unsurprisingly, higher, because the supervisor had to work at night; there seems to be no objection to the time recorded (14 nights) but Mr Matthews in effect proffers a rate of £320 per night as an appropriate night-time rate. There is no back-up for this and indeed it is common for night-time work to attract a substantial premium. I have no reason to doubt that it was reasonable to pay Patton at the rate of £360. The second point is an opportunistic one taken by Mr Matthews which is that there is a note against the invoice dated 15 June 2011 that a possible reduction might be secured once the works were complete. However there is no evidence that there was such a reduction and indeed the note itself says that the rate claimed per hour for this high level specialised work (£60 per hour) was itself a negotiated rate which had already been reduced. There is no justification for allowing any such reduction.

Reinstall Base Build Lighting in People’s City

Mr Fitch endorses a figure of £35,408.14 and Mr Matthews’ figure is £30,228.14, the difference between them being £5,180 being the same figure as for Item 7 above and on exactly the same grounds. For the same reasons, I prefer the Museum’s evidence and case on this.

Mr Fitch endorses a figure of £1,310 but Mr Matthews allows nothing. Essentially Mr Matthews says that this item has not been established. Ms Granville identified in her evidence that £1,310 was paid in respect of inspection of ceilings in November 2011 but this does not obviously relate to the replacement of emergency light fittings. Mr Fitch cross refers this item to Ms Granville’s further statement and it seems likely that the description of this item is not correct as it should relate to inspection of existing ceilings in the run-up to the royal opening. Her evidence wholly justified this item and it is established.

Mr Fitch states that the figure of £6,192.83 is established whilst Mr Matthews accepts only £3,096.42 or half of Mr Fitch’s figure. The AV equipment, it is accepted, will need to be removed and reinstalled as part of the future remedial works. Mr Matthews' argument is that the Museum has "not demonstrated that costs have been mitigated and I feel that a 100% recovery would be unjust." He points to there being no invoices. The onus of proof in relation to a failure to mitigate must be on AEW and this item was not specifically put to any of the Museum's witnesses. The work has clearly been done. Patton authorised it and I infer therefore that it was paid because the Change Order authorising it forecast the cost increase of exactly the sum supported by Mr Fitch. The sum should be allowed.

There is a minor difference of £113.71 between the experts in relation to this item, otherwise endorsed by Mr Fitch in the overall sum of £1,382.24. The difference is that the relevant invoice relates to replacing damaged down lights in Peoples City, it being suggested that the damage has not been proved to be the responsibility of AEW. I agree and the lower sum should be allowed.

This work was carried out in mid July 2011 over five days up to 18 July 2011. This was in the period in the immediate run up to the opening on 19 July 2011. There is no doubt that it was treated as extra work by Patton because it was the subject matter of a change request form which was approved in the sum of £4,114. Patton prepared a report for Ms Granville which identified that the original tender price for cleaning only covered galleries and not the other areas and that additional cleaning was arranged due to the failure/inability of the Museum cleaners to deal with the pre-opening phase leading to the need for Patton to provide additional cleaners to boost the client team. In the absence of evidence explaining why this cost arose "as a result of ceilings collapsed" (as was endorsed on the Change Form), this item has not been proved.

Ms Granville provided evidence in her third statement which showed that there were costs incurred by Turner & Townsend directly in connection with the ceiling collapses, such as attending meetings to discuss the impact of the ceilings, taking part in damage surveys, advising on the cost impact and evaluating costs associated with replacement options as well as processing 23 Change Request forms associated with the collapsed ceilings. The costs of this are identified as £3,210 from a breakdown provided by Turner & Townsend. Although Mr Fitch identifies the sum of £3,330 as attributable to cost management connected with the collapsed ceilings, there seems to be an arithmetical error of £120 (albeit the error may conceivably be mine). Mr Matthews’ view has not been established. In my view, it has been clearly proved.

This claim is for the sum of £10,635.60 for which Mr Matthews allows nothing. It relates to the Museum staff costs associated with the collapse of the ceilings and the need to ensure that the exhibition works were in place for the opening of 19 July 2011. Ms Granville and indeed Mr Williams gave convincing evidence which justified and explained that the need for the overtime costs (which are what this claim is about) only arose as a result of the substantial hiatus caused by the ceiling collapse. Timesheets were produced which justified the whole sum claimed. It is suggested that the payroll records were not provided but I can see no possible grounds for disbelieving Ms Granville’s evidence establishing the overtime involvement of some 21 employees, including herself, or the costs associated with this overtime. I have no reason to doubt her arithmetic. She demonstrated that hundreds of overtime hours were worked over nights and weekends by what seems to have been a highly dedicated and motivated staff. Mr Williams worked some 52 overtime hours whilst Ms Granville worked well over 100 overtime hours, including several Saturdays and Sundays. They were extremely well placed to know exactly what was going on. Mr Matthews’ position was that, although the Museum had provided timesheets, nothing had been established. This was an example of Mr Matthews adopting a blinkered and non-commercial approach. Ms Granville explained in evidence that all these overtime hours were worked. She explained the pay grades of each of the people who worked overtime. This part of the quantum is fully proved. It is if anything an understatement of the management time involved in the aftermath of the collapse.

Following the collapse of the ceiling, one of the sub-contractors engaged on the exhibition setting out works, Sysco, made a substantial claim for having to accelerate works to completion as a result of the collapse. The documentation reveals that against a larger claim, and on advice, on 2 July 2011 the Museum through Patton offered to Sysco £48,675.25 for additional labour costs and expenses in relation to their claims which was accepted by Sysco on 8 July 2011. Ms Granville confirmed her agreement by approving the Change Request Form submitted by Patton on 11 July 2011 in relation to this item and sum. Essentially, Mr Matthews does not really suggest that this sum was not payable or paid but he says that the Museum could have reduced the charge to £20,166.25. He does not criticise the Museum as such; all he said in evidence (Day 10 page 53 line 20) was: "I wouldn't have paid that amount". However the argument from AEW seems to be that there was a failure to mitigate or that the settlement was unreasonable; it is said that this was approved without any verification. Either way, the onus of proof is on AEW. One needs to bear in mind that this agreement related to costs incurred and to be incurred up to handover. Some of the costs were yet to be incurred. The Museum was in an extremely difficult position into which it had been put by the negligence of AEW. It had taken the decision, wholly reasonably, to do what it took to secure completion in time on or by 19 July 2011. It was faced with a sub-contractor which was seeking substantial compensation for the acceleration which it had already been asked to undertake and was undertaking. It could have adopted the approach now adumbrated by Mr Matthews which would have sought to reduce the amount ultimately agreed by some £28,000 but there was little or no time to engage in that sort of negotiation. It may be that the Museum was in a state of alarm if not panic at this stage and everyone, including Ms Granville, was working extremely long hours to overcome the serious problem caused by AEW. I can not see that it can be said that the Museum acted unreasonably in agreeing this figure for accelerative measures, even though on a strict quantity surveying analysis some of the figures might arguably be thought to be high. I allow the full amount.

23b Repairs to Equipment

This claim relates to the sum of £27,505.88 paid to a sub-contractor, Activation, which involved accelerative work. Mr Matthews allows £15,185.88 against this sum because, he argues, that this sum should have been challenged by or on behalf of the Museum. Again the argument is one of mitigation and the onus is on AEW. The sum was agreed and endorsed by Turner and Townsend at the time. It was made up of two elements, overtime working (£15,185.88, which Mr Matthews accepts) and £12,320 for additional resources provided by Activation over a period of four weeks. Originally, Patton recommended a figure of almost £16,000 in respect of the additional resources over five weeks but it seems clear that less than five weeks was required. The rate per person of £1,760 per week was endorsed by Turner and Townsend and, clearly in reliance on that and on the recommendations of Patton, Ms Granville then endorsed her approval on the Change Request form dated 20 June 2011 for seven man days at that rate reducing the total to £12,320. As for the preceding item, I cannot see that the Museum acted unreasonably in the circumstances even though it might have been the case that some employers might have been able to negotiate these rates and costs down somewhat. There is no real challenge to the deployment of additional resources. I allow the full amount.

£9,020 is claimed in relation to money paid to another subcontractor, Leach Colour. Mr Matthews proposes a figure of £5,412. The higher sum was endorsed as approved by Ms Granville on a Change Request Form from Patton dated 14 September 2011. A detailed breakdown has been provided identifying the additional labour, overnight and travel costs for up to 4 additional men between 20 June and 18 July 2011. It is clear that this related to additional labour resources required to ensure that the handover on 19 July could be achieved. It was based on an agreed day work rate of £150 per day per man. Mr Matthews’ figure of £5,412 is not adequately explained but he infers in his first report that the daily rate of £150 might be suspect because the figure quoted on 1 July by the firm suggested a day rate of £240. However, the same quotation identified an overall cost of £7,200 which is exactly what is being claimed for the additional labour within the sum of £9,020. Mr Matthews suggests that these costs have not been "mitigated" but provides no effective argument or evidence in support. I am satisfied that this claim has been proved and that there has been no established failure to mitigate.

This claim relates to the expansion of Patton’s role to accommodate the increased working levels engendered by the collapse of the ceiling. Patton had to provide additional cover for 24 hour per day working with full-time site managers and an assistant site supervisor and a project manager had to attend site for various program review meetings solely related to this issue. An additional manager was asked to be on site for the last week "to get the project over the line". Patton drew up a Change Request Form which identified the cost increase of £34,774.47 (which is the sum claimed) which was endorsed as approved by Ms Granville. Mr Matthews has reduced this amount by £4,774.47 because he argues that Patton has claimed for nightshift working at 1.5 times the normal day rate when the Working Rule Agreement is based on an additional third of the day rate; he also argues without much particularity that there has been a failure to mitigate. The Working Rule Agreement is not mandatory and Mr Matthews does not say that a nightshift rate, particularly one where the need for a nightshift has had to be generated at short notice. AEW has not established that it was unreasonable to pay what was paid to Patton for these additional services required to overcome the problems caused by AEW’s negligence. The full amount is allowed.

This relates to overtime work carried out by the Museum Staff in relation to the exhibition works. For similar reasons to those set out in relation to the “Museum overtime costs - Ceiling works” (Item 22), this claim is allowed in full.

£17,150 is claimed in respect of Mr Batchelor’s fees from which Mr Matthews allows nothing on the basis that this represents costs of the action. It relates to work done on various dates between 30 January and 28 May 2012, being 44 days at £350 per day. Ms Granville said in evidence (which was unchallenged) that he was involved in "collating information relating to the ceiling collapses". Mr Batchelor gave some evidence about this and it is improbable that his work was as such to deal with services for or in connection with the proceedings. First, the Particulars of Claim were served in late 2011 before he spent the time to which this claim relates. Secondly, as he said in evidence, these services culminated in the production of a report dated the 22 August 2012 which explained in its Executive Summary that the objective was the ascertainment of "the most cost and time effective means by which to reinstall the ceilings in the Wondrous Place and Peoples Republic Galleries with the least disruption to the visitor experience". I am satisfied that these services did not relate to providing support for or in connection with the proceedings but were primarily concerned with determining the appropriate remedial scheme and programme. It was reasonable for the Museum to retain Mr Batchelor, who had been involved before, for this purpose. There is no challenge as such to the time or rates claimed. I therefore allow the amount in full.

There is now no difference between the quantum experts following Mr Fitch’s re-attribution of some of these management costs into Item 21. Both he and Mr Matthews accept the sum of £1,620 which accordingly I adopt.

Summary of above

This has been split by the experts into six items of which only one (Item 2 relating to certain flat ceilings) has been agreed between the experts. The largest item relates to the new ceilings to the main galleries in respect of which Mr Fitch evaluates the likely cost as £435,699.61; this is for the replacement of the SAS ceilings. This figure is broken down into 30 different sub-heads of which only 14 are agreed.

The actual remedial works fall into four categories: preparatory works, removal and later reinstallation of electrical and mechanical equipment, installation of new ceiling panels and subsequent redecoration and cleaning. I have included those items which are agreed in the table at Paragraph 2 above. There is not a great difference between the parties or on the evidence that, broadly, all this work needs to be carried out. Mr Matthews evaluates the work at £299,338.99 in total. The architect experts were broadly in agreement that remedial work already carried out to an area on the first floor in which the SAS panels were well and properly supported in an SAS grid system independently from the ERCO electrical track was an appropriate remedy. It needs to be borne in mind however that this job can not be done in a simple way. There is a substantial amount of display items and cabinets which will need to be protected or removed. Secondly the ceilings are at different heights even in some of the same rooms; the ceilings slope and are often high. Thirdly, there is a substantial amount of electrical and mechanical equipment which needs to be removed carefully and safely. I turn to the individual items which remain in issue.

The difference between the experts is in effect whether a mobile or cherry picker type (or as Mr Matthews put it a "scissor lift type or a hydraulic one") should be used. Mr Fitch allows £40,680 and Mr Matthews allows £25,000 and there appears to be little argument about the quantum for either alternative. There is no difficulty in reaching a conclusion here because Mr Matthews conceded that he had not checked whether a mobile platform could work its way around all the exhibits and display cabinets or bases which will be left in place. I therefore accept Mr Fitch’s evidence on this as there is little doubt in my mind that regular scaffold can be made to work safely whilst protecting the display cabinets and includes for guarding against falling material.

Removal of house lighting in tray and other items

This is one of a number of items (Items 2.3, part of 2.5. 2.6 and 2.8) which Mr Matthews disallows as being effectively included in the rate for the ceiling replacement which he has allowed for. Mr Fitch, convincingly, however took these various items separately and at Appendix 3 to his Supplemental Quantum report dated 3 May 2013 he looks at all those items including Item 2.6 which is the actual installation of the new ceiling and comes up with an overall rate of £70.44 per m² for all these items. He then compares this rate with the work actually done on the Schools Lunch and Community Base ceilings which had their SAS ceilings replaced earlier on a labour only basis (largely) at a cost of £58.14 per m². To compare like with like however, one needs to add an allowance for the costs of providing new tiles, because the tiles used in that replacement operation were taken from stock. He took a figure of about £20 per m² for the cost of new tiles which will be required and the rate upon which he has based his estimates of the future works is in fact somewhat cheaper. This, in my judgement, represents a very good prospect as to what the likely cost will be in the future and the slightly lower cost used for all items by Mr Fitch can be explained by the fact that there will be substantially more work in the future remedial works. The real difference between the parties was explained, frankly, by Mr Matthews who said in evidence that his rate assumes re-using existing tiles (Day 9 page 126). It was accepted however (on Day 10 page 111) by Mr Reed QC that the old tiles which had been taken down in 2011 had been disposed of following a visit by Mr Pepper when he saw that the tiles were damaged and accepted that they should be destroyed. I therefore accept Mr Fitch’s evidence on quantum on Items 2.1 (£10,000), 2.3 (£5,000), 2.5 (£4,500), 2.6 (£61,020) and 2.8 (£5,000).

Mr Fitch has produced a break down in Appendix 3 of his Supplemental report to justify his adjusted figure of £12,600. Mr Matthews puts forward a figure of £10,000. Both experts in the "hot tub” (when giving evidence at the same time) pragmatically accepted that a figure between the two would be fair. I therefore propose to allow £11,300.

The well known architect, Lutyens, designed the crypt for the Roman Catholic Cathedral in Liverpool and produced other designs in or about the 1920s for the cathedral itself, which were never implemented. There is a large scale model of that proposed cathedral and design in the Museum and there is over the model a feature canopy which needs to be dealt with during remedial work. Mr Matthews is of the view that the work is not defined or is included in paragraph 1.5. I am not satisfied that this item has been sufficiently explained or defined and therefore it has not been proved.

This item essentially involves providing for new lamps as part of the installation of the light fittings and track. It is common ground and in any event I find that it is inevitable that in the course of removal there will be some breakages or other damage to bulbs which as Mr Fitch put it are "not the most robust items" and which Mr Matthews accepted were "quite fragile" (Day 9 page 133). Essentially, Mr Matthews suggested that re-lamping should take place as part of routine maintenance and the remedial works could be programmed at a time when such operations would need to be done in any event. It is accepted that the bulbs are very expensive. In my judgment, it is reasonable and sensible to make some allowance for the replacement of inevitably damaged bulbs which would otherwise have had a further useful life but for the remedial works. Mr Fitch’s evidence was that, because new bulbs will often be brighter than an adjacent undamaged bulb which will be less bright, the intensity will be mismatched; consequently, there may well have to be some re-jigging to ensure the bulbs of comparable intensity are adjacent to each other.

Mr Fitch has based his evaluation of £20,000 on the cost of lamps in 2010 which cost £19,000. He has rounded that up to reflect that the works are being evaluated at 2013 rates. However, I can and should assume that the contractors will be encouraged to take care in removing the equipment containing the lamps and it is more likely than not that a fair number of the lamps will not be damaged. I therefore allow £10,000 against this item given the inevitability of some damage and the need to re-jig the placement of new and old undamaged bulbs separately.

Once the new ceiling tiles or grids are in place, the extensive light fittings and tracking will need to be re-installed. Mr Fitch allows the sum of £25,500 for this work whilst Mr Matthews allows £15,000. Essentially they disagree as to whether the other’s sum is a reasonable estimate. I preferred the evidence of Mr Fitch who has provided an intelligible explanation at Appendix 3 to his Supplemental report: there are 170 lamps attached or connected to electrical tracks spread over two galleries; much of the work will be done at high level. It is important work because lighting illuminates the exhibits as well as the galleries in general. He has used a rate of £150 per lamp which includes installing the track as well as the light fittings; he cross-checked that on a pounds per metre basis (£75 times 340 m). There is little or no rational explanation from Mr Matthews to gainsay the quantum; he did say in evidence that he was not sure whether the entire lighting track needed to come down. However, it seems to me that it is reasonable to allow for all the light fittings and track to come down and indeed he and Mr Fitch allowed for Item 2.1 for removing the light fittings and track. This item has been proved.

This item is similar to the re-lamping item addressed against item 2.7 above. An allowance of £5,000 is a reasonably modest allowance in relation to the lamps in question given Mr Fitch’s evidence that new bulbs will often be brighter than an adjacent undamaged bulb and the intensity will be mismatched; consequently, there may well have to be some re-jigging to ensure that bulbs of comparable intensity are adjacent to each other.

Mr Fitch allows £12,600 whilst Mr Matthews allows £10,000. On a comparable basis to the accommodation which the experts reached whilst giving evidence in relation to Item 2.5 above, I allow £11,300.

Mr Fitch allows £16,000 whilst Mr Matthews allows £5,000. Mr Fitch provides a detailed breakdown involving four men for two 40 hour weeks for each gallery and assumes that they will be working at least over time. He explained in evidence that the finishes to the walls are very sensitive and being bright white. The finishes carry through into the skylight lobby which is also a through route from the goods lift; Mr Fitch’s allowances cover for such related work outside the two galleries in question. Mr Matthews was not in a position to challenge his breakdown, possibly because he had not considered or had not had time to consider Mr Fitch’s Supplemental report which contained the breakdown. There is no dispute that there will have to be redecoration and £16,000 seems to be an extremely reasonable allowance, given the importance of the redecoration work, the height of the galleries and the need to work out of opening hours.

Mr Fitch allows £16,000 whilst Mr Matthews allows £5,000. In his Supplemental report, Mr Fitch provides a detailed breakdown of the man hours and rates involved. He highlighted in evidence that this involved the removal of protection which had been placed on or around floors, walls and exhibits. He explained (and indeed photographs were produced which demonstrate) that there are numerous exhibit stands in these galleries. He said and I accept that extreme care has to be taken particularly in relation to the exhibit stands because it will be important that the display cases which will have been protected are not damaged. Mr Matthew’s position was a broad one that he believed that it was a lot of money and he did not know how many of the existing exhibits were going to be encased or how much protection was going to be put down. He allowed in his figure for 250 hours of work at £20 per hour. I accept Mr Fitch’s evidence that £16,000 is a reasonable allowance. Mr Matthews could have done but did not do any great analysis. He had accepted a figure of £19,200 for putting up the protection in the first place (item 1.2) and he was therefore able to make an intelligent assessment in relation to that; there is no obvious good reason why he could not have done so in relation to this item.

Mr Fitch identified in evidence that this item related to the need to flush the ventilation system because the remedial works particularly on and to the suspended ceiling will generate dust and it will have got into the ventilation system. Mr Matthews said that what one would do is to blank off the input and extract for the ventilation to these galleries and protect the filters to prevent the dust getting into the ventilation system; the cost of that and rebalancing could come to £3,000. Mr Fitch’s response to that was that, although that sounded very simple, these were specialist areas and a degree of caution had to be applied when doing this work particularly given it was at high level; he says that much more work would be involved than Mr Matthews had suggested. It seems to me that Mr Matthews here was talking in a sensible and pragmatic way but I agree with Mr Fitch that even the work which Mr Matthews’ is suggesting is more complex. I therefore propose to allow £6,000 based on Mr Matthews’ rates of £500 for two men per day but relating it to 8 days and his £2,000 for the rebalancing.

Mr Matthews and Mr Fitch agreed in evidence that 15% addition for professional fees was justified. I accept that.

I therefore summarise the sums which I have allowed in relation to the SAS ceiling costs:

There is a very central difference between the experts in relation to what the cost of the Armstrong ceiling remedial works will be with Mr Fitch supporting a figure of £289,097.14 (including an unpleaded £50,000 allowance for additional security and museum staff costs for decanting and recanting sensitive collection material) and Mr Matthews £63,761.57. There had been a somewhat movable feast as far as the quantification of this item is concerned with Mr Fitch identifying in his original report a higher figure (excluding the £50,000 allowance for additional security and museum staff costs for decanting and recanting sensitive collection material) and with Mr Matthews moving from his figure of £29,605.82 in his report of 2 April 2013. By the time that they came to give evidence on Day 9 of the trial each had produced calculations supporting their latest figures:

On the whole, I prefer the evidence of Mr Fitch in relation to the costing of these remedial works for the following reasons:

The consequence of the above is that the "base" and "enhanced" rates used by Mr Fitch need to be adjusted downwards to £38.25 and £45.25 respectively which, applied to his measurements of 366m and 1880m, produce totals of £13,999.50 and £85,070 respectively producing a total of £99,069.25. To this should be added preliminaries which Mr Fitch has valued at 15% and Mr Matthews has assumed are already within his prices, albeit that he has added an additional £11,000 for what he calls "additional preliminaries" and an additional £2,100 for "additional security". I accept the evidence of Mr Fitch; his prices did not include for preliminaries and 15% is a reasonable allowance particularly given the fact that the museum will need to stay open to some extent and there will be a substantial interface with the public and the Museum staff. For reasons given elsewhere in this judgment and in the earlier judgement, 5% addition for contingency is reasonable and realistic to allow for the many things that could go wrong given the nature of the work and its location. Additionally, there should be an allowance for professional fees; there is little or no difference between the parties’ experts on this with Mr Fitch proposing 5% and Mr Matthews an allowance of £10,000 (equivalent to a percentage of some 19% on his remedial work cost). I consider that the 5% allowance is extremely modest given the need for consultants to specify and design, secure tenders, supervise, cost manage and liaise closely with the client.

I summarise the damages due under this head therefore as follows:

The Museum claims £242,326.60 is in relation to its own staff costs including internal logistics, curatorial, handling, management and supervision costs during the period within which the remedial works to the ceilings need to take place and, indeed during the period in which the works to the amphitheatres will take place. This internal work will cover most of the ceilings in the museum, both the old SAS and the Armstrong ceilings. A detailed estimate is provided identifying the types and numbers of staff involved and the number of weeks which each type of staff member will be required. The estimate is predicated upon the basis of the construction work lasting 26 to 38 weeks.

Ms Granville gave some telling, illuminating and overall convincing evidence about what was likely to be involved. She said that the two main galleries whose ceilings are to be replaced are fully fitted out museum exhibition spaces containing about 3,500 museum artefacts, some of which are of very high value and all of which have cultural significance. A lot of them are very fragile, she said, and many, such as textiles, susceptible to dust. She explained that more than 800 of them are on loan from individuals and institutions all of whom will have to be contacted and their items will need to be returned before the construction period and brought back once the exhibitions can be reinstalled. She gave an example about a pair of John Lennon’s spectacles, regarded by many Beatles fans as particularly iconic; these are on loan from the Victoria and Albert Museum in London and are extremely valuable (possibly worth about £1 million). The V&A will require that object to be returned by hand (and not by courier but by a trusted member of staff) to London and then they will be returned to Liverpool after works are finished in the same way. She explains that many of the items on loan are subject to conditions from the lenders such as the environmental conditions in which they must be exhibited and whether they are allowed to be in the proximity of construction works. So far as the numerous items from the Museum’s own collections, decisions will have to be made about them as to whether they can be protected in situ or need to be removed and stored; they may be stored on site but there will be items which will have to be stored off-site. Graphics, cases and artefacts will need to be protected, removed, documented and then stored. She describes this all as a "huge exercise". After the works are over, all the artefacts, graphics etc will need to be returned and put in place. She will be allocating herself full time to the remedial works exercise. She explained that the only way in which the Museum can undertake this work will be by deploying accordingly a substantial part of its staff who have existing knowledge of the project; in order to do this, other people will have to be taken on "backfilling" the substantive museum role of the people who will be seconded to the remedial works programme. She explained that the Museum operates eight busy venues and that the Museum can not allow staff resources at those other venues to be detrimentally affected by staff having to be supported and deployed in connection with the remedial works project. She explained that this would be done by bringing in fixed term contract directors, registrars, security and conservators.

She and Mr Batchelor (and doubtless others within the Museum) have done some planning and have decided, reasonably in my judgment, that the works to the ceilings can only be undertaken in one gallery at a time because it would be disastrous reputationally to close the two major galleries in the new museum at the same time. She and he and others have devised a 35 week programme which would allow the museum to keep one of the two main galleries open at all times.

She was subject to firm but fair cross-examination by Mr Reed QC and she answered, in my view, truthfully and succinctly. She justified every item and person on that schedule accepting a very obvious error relating to a storage person said to be required on site for 12 days a week for 15 weeks. She was asked questions about the transport allowance of £2,000 which on reflection she believed was an under-estimated, given the need to return items back to lenders and the need to take a short lease on storage facilities because the Museum’s own storage facility is full. She considered in the light of this that the claimed contingency of 10% was too low. She was not really challenged on the salary cost of the individuals involved. Mr Batchelor, who had been involved in primarily drawing up the estimate of time likely to be involved, explained that his expertise was "in taking objects in and out of museums"; as indicated earlier he had prepared a report in the summer of 2012, about which he was not challenged in any material respect. He explained that the estimate was prepared in conjunction with people from the Museum and that the numbers of staff identified in the estimate as being required were based for instance from an estimate of how many objects were in the display cases in the galleries, how big the cases were, how many objects were indicated, how many people could safely handle the objects, how long it would take to get the objects in and out and the like. He expressed confidence in the museum staff to whom he spoke because as he said they "have a good understanding of how long it takes to load and unload a show case". He said that the figures were reasonable albeit that they were "very tight". There was a cross-check with how long it had taken to put the items in back in 2010.

In my judgment, this claim is substantially made out on the evidence. The Court has no reason to be sceptical about the figures put forward. The salary costs need to be reduced to reflect a five-day week for Mr O'Connell, the storage man. Other than that I am wholly satisfied that all the staff costs and the numbers of weeks allowed for each person are reasonable and realistic. This produces a total salary cost of £192,006.16. To this should be added the transport allowance of £2,000 (for which see above) and £10,000 for site security; this latter item was not specifically challenged and in logic additional security will be required with possibly numerous workmen around working out of hours. It is reasonable and realistic to allow some contingency because in a sense it is foreseeable that the unforeseeable will happen and things will go wrong. 10% contingency had been allowed but I consider that it would be reasonable to allow the same contingency, 5%, as has been allowed for the ceiling works estimates. This produces a total of £214,206.47 as damages due under this head.

There is a relatively modest loss of profit claim which relates to the loss of trading income from corporate hire, and reduced trade in the shop and café. In my judgment on all the evidence, it is obvious that the extensive remedial works both on the inside and the outside are going to discourage visitors from coming to the Museum and not being able to enjoy the experience of a fully open Museum. Unchallenged evidence was given that galleries and atrium areas are currently often let out for corporate events and entertainment. Mr Batchelor gave some evidence based upon the first year's trading position when the Museum was not fully open for the whole year to the effect that there was a net trading profit of £2,175 a week, which related to a 26 week period and produced a loss of £56,466. Ms Granville suggests that this is an underestimate because she considers that the trading will be lost or reduced for a 35 week period. She based her figure on the forecast figures for 2012/2013; reference to the actual figures for 2011/2012 shows a drop in trading profit on the retail sales from £39,305 to £34,560 but an increase in the catering profit from £57,417 to £75,506.

She was not cross-examined as to credit either generally or in relation to this item but she did confirm that the Museum’s Director of Finance provided the figures. I am satisfied that it is highly likely that the closing of each of the main galleries at different times over a period of 35 weeks is extremely likely to lead to a reduction in revenue; inevitably word will get around that substantial works are being done at the Museum and the "footfall" will inevitably be reduced. It is likely that there will be a substantial reduction in corporate events during the period of remedial works, less people will purchase from the gift shops and less people will avail themselves of the catering facilities. That will inevitably lead to a loss of revenue, albeit that it is unlikely that there will be a significant drop in the overhead cost. Trading profitability will be affected. In those circumstances the Court must do the best it can. In my judgment, it is safe and prudent to base the actual loss on the figure put forward by Mr Batchelor based as it was on the 2011/2012 figures; they are at the very least verified by the figures and accounting information put forward by Ms Granville. A reasonable and probably minimum assessment is, in my judgment, a rounded down figure of £60,000 based on the actual figures for 2011/2012 because those figures represent actual trading profit as opposed to forecast profit.

Mr Fitch’s figure for this is £6,294.38 whilst Mr Matthew’s is £3,319.76. Both experts produced breakdowns which do not obviously correlate. Mr Matthews says that he agreed Mr Fitch’s measurement (63m²) but then marks that down to 60 m² in his breakdown. He allows only £400 for disconnecting and then re-fixing lighting whilst Mr Fitch allows £3,150. In my judgment a reasonable allowance is something between these two figures on the basis that I have tended to find Mr Fitch much more reliable. I fix the sum of £5,000 accordingly.

Repayment of AEW Fees

The Museum claims an indemnity against any liability for damages which it might have, in effect under the Occupiers Liability Act, in negligence or otherwise to the unfortunate person who was apparently injured by the falling SAS ceiling. This is a totally reasonable claim and, unsurprisingly, it has not yet been quantified by the alleged victim. If the Museum has any liability at all to this person, I find (as between the Museum and AEW) that the dropping of tiles from the SAS ceiling in question was caused by the negligence of AEW. This is a paradigm case for a declaration that the Museum should be indemnified by AEW against any liability which it may have to the alleged victim.

I summarise the results of this judgment in terms of the damages to be awarded to the Museum against AEW over and above those referred to in my first judgment:

The above sums are exclusive of any interest entitlement. I will hear the parties on interest and costs at a later stage. I see no reason why, now I have handed down two judgments addressing all issues on damages why the sums judged due should not be paid.