Forensic Services

Independent review of a claimant’s costs claim

FRP assesses costs claim under environmental post-completion warranty in dispute

Background

The claimant purchased an aluminium plant in southern France which included the grant of an environmental post-completion warranty from the defendants (the sellers). Under the warranty, the claimant was entitled to seek compensation for costs relating to any remedial actions that needed to be carried out in accordance with French environmental law.

The main issue in dispute was the level of costs incurred by the claimant, in relation to the storage and treatment of bauxite residues, and the implementation of a monitoring programme regarding the environmental impact of the discharge of waste products from the plant into the Mediterranean Sea.

FRP was engaged by the claimant’s solicitors to conduct an independent review and verification of the evidence to assess the validity of the claimant’s costs calculation.

Action

Our work involved performing a review of invoices and other supporting documentation – mostly in French – regarding services and works carried out by third-party consultants on behalf of the claimant.

Many of the invoices included costs related to various remedial work, only some of which qualified as ‘environmental losses’ under the warranty. Accordingly, our assignment also included an assessment and allocation of costs to the appropriate remedial action.

Outcome

We prepared an expert forensic accounting report setting out the amount of qualifying remedial actions and highlighting any discrepancies in the claimant’s calculations. Our evidence was not contested at the arbitral hearing.

Our evidence was not contested at the arbitral hearing. Chris Osborne Forensic Services