The purpose of this article is to generate debate amongst the readers of Arbitration -News and Views.

During a discussion with Paul Darrington, he and I spoke about whether or not losses owing to low morale of the management and workforce on a construction site could ever be classed as direct loss and expense. The issue was twofold, namely: in a dispute where it could be shown that low morale was the direct result of endless changes brought about by the Employer or his professional team, (i) could there be a specific head of claim for loss and expense owing to low morale; and (ii) do arbitrators, adjudicators and judges inevitably make an additional allowance for it without specifying low morale as the cause.

I have never seen a head of claim which directly specified low morale as the interim route to an effect that could be measured in some way, indeed, I have not seen low morale used as part of a statement of case. However, reading between the lines it is often low morale which is being referred to when the effect is described as disruption and disturbance.

For example, let us consider the often nebulous effect arising out of matters which have initially caused disruption and disturbance to the normal flow of work on a construction site. Let us say that many variations have been made to a job and that all the variations have been valued in a way that does not take account of their individual or collective effect upon the job generally. Let us say that it can be demonstrated by sound opinion that the difference in cost between doing the job as originally planned and actually doing it is a sum of £100,000. Let us say that the argument in support of a claim for the £100,000 would be that the normal level of efficiency of site activities was severely affected and the output dropped and that this was an effect caused directly by all the variations. Providing the respondent / defendant could not counter the argument with contrary evidence, such a case would be sustainable if the linkage between cause and effect was demonstrated on the balance of probabilities. However, let us now say that the claim stated that the effect of all the variations upon the job progressively lowered the morale of the management and workforce. Moreover, that it was in part the low morale which resulted in the extra cost of £100,000, would that still be a sustainable case to argue? Would the situation be different if it was stated that the extra cost would have been only £50,000 had it not been for low morale causing the other £50,000?

Whether or not a bold-face claim for the effect of low morale in the linkage between initial cause and final effect would be a sustainable case, do experienced arbitrators, and the like, take the effect of low morale into account when making an award. And, if they do it consciously and seek to maintain integrity how can they account for it in their reasoning? Is there a greater possibility that an experienced arbitrator, and the like, may subconsciously take factors of low morale into account and merely describe the sum awarded in normal terms of disruption and disturbance?

At least, presumably the late Lord Devlin accommodated such thoughts when he spoke of 'stretching the law or moulding the facts to fit the law [as being] the time-honoured method by which the judge consciously or unconsciously makes room for the aequum et bonum.' He spoke of 'the unconscious biases which any man may have and which he cannot eradicate because he does not realize that they are there.' He opted for the view that such 'a bias [was] in favour of the justice of the case and against any law that seemed to deny it.' He added that, 'once a judge has formed a view of the justice of the case, those facts which agree with it will seem to him to be more significant than those which do not' (Lord Devlin, The Judge, (Oxford University Press 1981) pp 90-91)

The above text identifies a range of issues. I have avoided trying to summarise them into a list of specific questions because it is hoped that readers will model their own questions around the topic of low morale in the context of claims for loss and expense and, of course, submit their views upon the subject. Observations with supporting case law is eagerly awaited by at least two readers of Arbitration - News & Views.