What was meant to be a landmark healthcare project for Ireland has now taken a serious legal turn.
The long-running contract dispute surrounding the National Children’s Hospital, being built on the St James’s Hospital campus in Dublin, has landed firmly in the fast-track Commercial Court, highlighting just how complex and costly the project has become.
Builders Take the Hospital Board to Court
At the centre of the dispute is BAM Building Ltd, the main contractor for the project, which has initiated five separate sets of legal proceedings against the National Paediatric Hospital Development Board.
The cases stem from disagreements over delays, cost increases, and how contract terms should be interpreted as the project evolved over time.
Judge Allows Fast-Track Hearing but Pushes for Talks
On Monday, Mr Justice Mark Sanfey agreed that the cases should be handled under the Commercial Court system, recognising their scale and urgency.
However, rather than pushing ahead immediately, he paused proceedings for a week.
The judge made it clear that he wants both sides to use that time to explore discussions, stressing that completing the hospital remains the top priority.
A Project Whose Costs Have More Than Doubled
When first approved, the National Children’s Hospital was projected to cost just under €1 billion.
That figure has since ballooned to more than €2.2 billion, turning the project into one of the most expensive public infrastructure developments in the country and a regular source of public and political scrutiny.
How the Legal Actions Reached the Commercial Court
The move to admit the cases to the Commercial Court was made by senior counsel Michael Cush on behalf of the hospital board, with the consent of Eoin McCullough, representing BAM.
While both sides agreed on the fast-track process, the underlying disputes remain unresolved.
Dispute One: Delays in Constructing the Hospital Frame
According to an affidavit from BAM’s commercial director, Seamus Kealy, the first case relates to delays in building the hospital’s structural frame, dating back to around October 2019.
BAM sought extra time to complete the work and an increase in the contract value.
A conciliator later supported this position, recommending an additional payment of about €16.75 million.
Dispute Two: The “Global Delay” Claim
The second and most significant dispute concerns what BAM describes as a “global delay claim.”
This covers a series of delays that occurred between December 2019 and February 2023.
A conciliator recommended extending the completion deadline by 267 working days and increasing the contract sum by roughly €107.6 million to reflect the impact of those delays.
Dispute Three: How Inflation Should Be Calculated
Another disagreement centres on how inflation costs should be calculated in light of the extended timeline.
BAM argued that inflation should be factored into the revised contract amount.
The conciliator agreed, recommending that BAM be paid just over €19 million to account for rising costs.
Dispute Four: Design Changes to the Roof
The fourth case focuses on a design change made in August 2020 to the level 7 roof of the hospital.
This alteration, BAM says, added to its costs.
The conciliator recommended an increase of approximately €2.5 million to cover the impact of the redesign.
A Shock Bond Payment Demand
Tensions escalated further last August when the hospital board called in a €16.7 million payment under a bond issued by Zurich, which BAM was required to provide for the frame construction works.
Mr Kealy described the move as both shocking and hard to understand, especially since the contract states that conciliator recommendations remain binding unless overturned by a court.
Why BAM Filed a Fifth Case
Under the terms of the contract, BAM was obliged to take four of the disputes to the High Court following the conciliator’s recommendations.
After the bond was called in, BAM launched a fifth set of proceedings, seeking to pause all existing actions.
The company also plans to ask the court to merge the four earlier cases into a single hearing.
Another Case Already Running in Parallel
Adding to the legal complexity, the hospital board has its own separate case against BAM already before the courts.
In that action, the board is asking for a declaration that its instruction to begin Phase B of the project was valid and legally enforceable.
What Happens Next
For now, the court has given both sides a short window to hold discussions in the hope of narrowing the issues or reaching some form of agreement.
If talks fail, the Commercial Court will set directions for how the multiple cases will proceed, potentially shaping the next chapter in one of Ireland’s most controversial construction projects.
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