Case No. 0LS79020

91. For the Trust, Mr Bowdery submitted that the starting-point was an understanding of the exceptional nature of what had happened: the factual and expert evidence all showed that it was almost if not actually unheard of for a significant construction project to be completed by means of a series of letters of intent. The explanations proffered for the failure to obtain an executed contract were unpersuasive. The evidence did not justify a conclusion that Kier had been in bad faith and trying to find excuses not to sign the contract—that Kier was “as slippery as soap”, to use the expression that cropped up at the trial. Similarly, the failure to procure a contract could not be justified by reference to the risk that, if subjected to pressure, Kier would have walked off site; there was no threat to leave site unless a further letter of intent were issued, and Kier had worked for significant periods without the comfort of a letter of intent. Rather, if TTPM had acted with reasonable care and diligence, a contract would have been executed before the time came when it was against Kier’s self-interest to sign the contract.92. Mr Bowdery submitted that, once the letters of intent were no longer being used for their classic purpose, TTPM was in breach of duty by failing to advise of the risks of continuing to proceed under letters of intent: the letters of intent did not entitle the Trust to liquidated damages; they did not enable the Trust to require completion of the works by a certain date; they did not impose liability on Kier for failure to comply with the design standards of the proposed contract; and, as more works were completed and more payments made under letters of intent, the incentive for Kier to execute the necessary contract was reduced. This failure to advise was perhaps borne of a failure of understanding, as Mr Talabani clearly laboured under the misapprehension that the terms of the intended contract applied to the works completed under letters of intent, at least as regards the right to recover liquidated damages. That lack of understanding was shown most clearly in the decision to issue the final letter of intent. Insofar as it might be said—as was said by Mr Hinchliffe—that the true effect of the letters of intent, in particular regarding the recoverability of liquidated damages, was a difficult legal question on which project managers might hold different views, the answer was twofold: first, it was TTPM that drafted the letters of intent and acted on the basis of a specific understanding of them, in circumstances where it put itself forward as providing a “one-stop shop” that included legal expertise in respect of building contracts; second, if TTPM was not itself competent to understand the legal effect of the letters of intent and give advice in that regard, it should have advised that professional legal advice be sought, in view of the practical importance of the matter to the Trust.93. The letters of intent from Revision D onwards should not (submitted Mr Bowdery) have been issued, and the decision to advise the issue of the final letter of intent was “beyond negligence” and a matter of “blind fury” on Mr Talabani’s part; there was no evidence to support the contention that a reasonable or responsible project manager would have advised such a course. TTPM’s contention that it was too dangerous to refuse to issue further letters of intent, because of the risk of Kier leaving site, was not to be accepted, because it implied that no reasonably competent project manager would ever push for a contract if there was the slightest risk that the contractor would walk away. If the barest risk of such a result was sufficient to preclude robust negotiations between project managers and contractors, no contract would ever be concluded. The proper course was—as Mr Binns had said in substantial agreement with Dr Aldrige—to stop issuing letters of intent and push for a contract.