Highways England wins legal battle against M25 contractor
Highways England has won a long-running legal dispute with its M25 contractor Connect Plus over additional payment claims made by the client to the joint venture for response work following major incidents.
A High Court judge yesterday rejected claims from Connect Plus that Highways England had agreed to give it powers to define whether an incident was “critical” and worthy of additional monthly payments.
In 2009 Connect Plus, a joint venture between Balfour Beatty, Skanska, Atkins and Egis, signed a design, build, finance and operate contract for the M25 for 30 years at a value of £6.2bn.
In April 2015 this was transferred to Highways England, following the organisation’s creation.
As part of this contract, Connect Plus was to be paid monthly instalments for its maintenance work on the M25, as well as bonuses, or “critical incident adjustments”, for unplanned responses to incidents where part of the M25 was closed for two-and-a-half hours or more.
The dispute, which began in 2010 but was lodged with the High Court in 2016, revolved around both parties’ interpretation of a “critical incident” and which had the power to decide whether an incident could be categorised as “critical”.
Highways England argued, as written in the M25 DBFO contract, that it was only the secretary of state or Highways England that could deem an incident “critical”.
However, Connect Plus argued that, following the signing of the DBFO deal, it had agreed with Highways England that it would be given the power to declare “critical incidents” using criteria drawn up in the government’s Network Management Manual.
Justice O’Farrell ruled that under the DBFO it was the secretary of state, or someone acting on behalf of the secretary of state, that was responsible for deciding whether an incident was critical.
He added that the parties did not enter into any binding post-contractual agreements giving Connect Plus power to decide on whether a critical incident had taken place, and as a result no changes should be made to any incidents judged as critical before the case.
A joint statement from Highways England and connect Plus said: “Today, Connect Plus and Highways England received the Technology and Construction Court’s final determination in relation to the level of payment made by Highways England to Connect Plus for the management of critical incidents that cause traffic delays across the M25 network.
“Both parties will now work together to put the court’s ruling into effect.
“The M25 DBFO contract has been working well over the last eight years, delivering first-class operation and maintenance services for Europe’s busiest motorway, and will continue to do so.”
Connect Plus is currently 50 per cent owned by Edge Orbital Holdings, 40 per cent owned by BBDE Orbital Holdings (Balfour Beatty and Dalmore Capital) and 10 per cent owned by Egis Partners.