Construction Contract Dispute: Overhead Recovery and Loss of Profit
Construction Quantum
Background
A specialist subcontractor disputed the final account on a major infrastructure project, claiming head office overhead recovery and loss of profit on the remaining works.
Instruction
CPR Part 35 party-appointed expert to provide financial accounting expert evidence on the overhead recovery methodology and loss of profit claim.
Approach
Analysed the subcontractor's audited accounts and management information; assessed whether the Emden or Hudson formula was appropriate; applied the correct financial data to the chosen formula; calculated loss of profit on remaining works.
Outcome
Sterling Forensic's analysis produced an overhead recovery figure different from both parties' initial positions, and identified additional recoverable loss of profit elements not previously claimed. The matter settled following exchange of expert reports.
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