Nic Rigby is the CEO of NRG Management Consultancy (NRG) and he has 25 years experience of legal disputes in the energy sector, including 3 with a value > £50m. Nic principally works on renewable energy and electricity transmission disputes and is an experienced expert witness. For more information on Nic’s experience see NRG documents. NRG offers the following services:
Expert Witness - Whilst the majority of expert witnesses have a clearly defined role in terms of advising the client and the court/ arbitrator on matters within the scope of their expertise. NRG, like all good expert organisations, carries out such activities in accordance with Part 35 of the Civil Procedure Rules and the Civil Justice Council’s Guidance for the instruction of experts in civil claims, or the equivalent instructions in courts in other countries or arbitration jurisdictions. Where NRG’s approach is different is that we ensure maximum value to the client by adding to this role working pro- actively with all parties involved in the dispute.
NRG Management Consultancy operates within power generation and electricity transmission/ distribution and provides expertise in quantum, project management and engineering. An early review of the case is an obligatory part of the approach taken. This is done in conjunction with the legal team so that the client has a perspective of how the case could be resolved. This expert and legal review is intended to set the clients expectation as to the financial impact of how the case is likely to settle.
This should facilitate the client coming to an early negotiated settlement. If it doesn’t because the other side believe that they can achieve a better outcome then the process moves into a litigation phase. If the client does not accept the outcome of the review then whilst NRG Management Consultancy are happy to continue into the litigation stage our normal expectation is that the client will seek another expert.
As the chart on the right suggests, the maximum information does not become available until the value of a negotiated settlement has reduced. So, the importance of maximising the information and making an early decision is paramount.
During the litigation phase NRG would expect to undertake a series of meetings with the other sides experts with the aim of reducing the number of issues on which the experts have different views. This would enable the removal of some issues, particularly minor issues and those that cannot be defended by a robust expert.
The court/arbitrator need to give careful consideration to the major issues and the experts need to facilitate that activity by taking minor issues “off the table.” NRG’s approach is to take a pro-active part in resolving the dispute in so far such action is appropriate but including settlement proposals, evidence collection, disclosure etc.
NRG Management Consultancy’s offer of a dispute management service is unique although there are others who offer similar services outside of the energy sector. The concept is based on a service Nic Rigby carried out as Dispute Director on the £300m Greater Gabbard dispute (see Links).
All projects will have multiple stakeholders, particularly offshore wind with multiple investors, lenders and contractors. In a dispute situation the number of stakeholders and their objectives become even more divergent. These objectives must be reconciled and in such a way that the action plan to complete the project and resolve the dispute are expedited so as to maximise NPV, including considering all reputational issues.
The value proposition of resolving a dispute is highly dependent on the probability of the court or arbitration process delivering a favourable outcome. Lawyers will tell you that even a perfectly robust case only has a 75/80% probability of winning arbitration. So, it is critical that all case critical information is collected and made transparent to those who can form a view on the probability of success. The probability should be determined by your barrister or advocate with input from expert witnesses and directors of the companies who own the project. For offshore wind this could be a diverse group of individuals one of whom represents the company operating the project and therefore unfortunately is likely to have their finger prints on the evidence.
To resolve this challenging situation the project needs a Dispute Manager who can manage resolution as a project in itself. The probability tree, see figure, is one of the tools used to determine at what price a dispute should be settled by negotiation.
The value of each outcome needs to be considered which should take into account all costs including costs that might be recovered at the end of the legal process both by the project and from the project if costs are awarded to the other side. The intangible costs in terms of the psychological damage to the personnel who must take part in the trial and the lost opportunities that companies will miss out on because of their energy and resources being spent on a protracted dispute, must also be taken into consideration. Once the costs have been evaluated the probability of each outcome should be assessed.
The benefit of the decision tree is that the methodology and the outcome are entirely transparent, so it is extremely useful as a tool to support the team's decision.
Even if the other party is not interested in a pre-trial settlement projects should make offers at what they believe is an appropriate settlement point. This ensures that the other party has no misunderstandings as to the project’s expectation and provided the offers are submitted by the correct procedure this approach can ensure that the project is protected from a significant share of the legal costs even if they lose the dispute.
There are several examples see Hollow Victories box where cases have been settled by courts and the amount in dispute is less than the costs involved. Clearly this is not a place where clients want to find themselves. One must also wonder how their solicitors allowed such a situation to come about.
All major European projects cover several European jurisdictions, as contractors, owners and build location are likely to involve 3 or more countries. On these projects the project and contract language are typically English. This type of project is the focus of NRG Management Consultancy’s work so more than 50% of work undertaken to date has been associated with projects outside of the UK. NRG Management Consultancy works in English so the best fit is in areas where the project and contract language are in English. NRG Management Consultancy has also worked on projects outside of Europe but disputes that have at least one European element to them are preferred.