Hudson Formula

The Hudson Formula derives from Hudsons Building and Engineering Contracts and is used for the assessment of damages in construction claims.

The formula is:

(Head Office overheads + profit) ÷ 100 x contract sum ÷ period in weeks x delay in weeks

Where Head Office is head office overheads and profits percentage submitted in tender.

cf the Emden Formula where only the actual head office overheads percentage is used.

A claimant must prove a necessity to maintain resources on the project and an inability to re-allocate them to more profitable work and must give evidence of the processes within head office to enable an assessment of the portion of overheads, if any, that are attributable to the delay caused by the breach.

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