Measuring Delay Damages: Jury Verdict Method
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This is Part VII in a series of Blog posts dedicated to explaining delay damages. Previous posts in the series have discussed proving that a delay occurred, addressed the most applicable and common defenses and varying methods to calculate delay damages—the Total Cost Method, the Modified Total Cost Method, the Eichleay Formula and damages for an increase in labor, material and equipment costs. Another method used to calculate delay damages is the Jury Verdict Method, which is a combination of a few methods previously discussed.
The Jury Verdict Method is limited in its use, but is still a very viable option to calculate damages. This method is simply an estimation of damages calculated from the best available evidence. This estimation is similar to that of the Total Cost Method. The Jury Verdict Method distinguishes from the Total Cost Method, however, by seeking to determine the specific extent of the damages that flowed from the delay. This is done through the incorporation of expert opinions on the reasonable cost attributed to the claimed delay.
The Jury Verdict Method has been used for over a half century. The Court of Claims found the use of this method appropriate when the claimant has not adequately shown the reasonableness of their claim.[i] This method does not change the fact that a clear showing of liability is necessary for recovery. What the Jury Method does allow for is an approximation of recovery where there is a justifiable inability to authenticate the amount of the injury by direct and specific proof.[ii] The Jury Verdict Method is used most often when competent but conflicting evidence is presented regarding damages.
Specific elements are required prior to recovery under the Jury Verdict Method. Prior case law required four elements, but modern courts required only three. The contractor must show (1) that a clear proof of injury exists; (2) that there is no more reliable method for computing damages; and (3) that the evidence is sufficient for a court to make a fair and reasonable approximation of the damages.[iii] If, however, a more exact method applies the Jury Verdict Method is not used. This method seems very favorable to the contractor, simply present evidence that meets the three requirements and let the court determine the amount of damages. That is, however, not how the Jury Verdict Method works. Sufficient evidence must still be presented that allows for a reasonable approximation of the amount of the damages.[iv] Additionally, if the court is left in a position to guess the amount of compensation the contractor is entitled to, compensation will be denied.[v]
The Jury Verdict Method is very similar to the Total Cost Method—both are used when no more exact method is applicable and absolute certainty in the amount of damages is not required or possible—but the two methods are also distinguishable. The Total Cost Method does not attempt to segregate damages according to specific delays and it assumes numerous factors (as discussed in Part III). The Jury Verdict Method requires concrete evidence of the delay and specific damages that resulted from the delay, according to expert opinions. Check back for the next post of the series to learn about another method to measure damages that deals with an often-raised claim that is very difficult to prove, which is that of loss of productivity.
[i] Western Contracting Corp. v. U.S., 144 Ct. Cl. 318, 334 (Ct. Cl. 1958); Needles for Use and Benefit of Needles v. U.S., 101 Ct. Cl. 535 (Ct. Cl. 1944) (setting precedent for use of the Jury Verdict Method).
[iv] Ne. Sav., F.A. v. United States, 91 Fed. Cl. 264 (Fed. Cl. 2010) dismissed, 453 Fed. Appx. 961 (Fed. Cir. 2010).
[v] Appeal of Eagle Paving, AGBCA No. 75-156, 78-1 B.C.A. (CCH) ¶ 13107 (Apr. 3, 1978).