– They have destroyed the company. Runar Brekken is general manager of Alf Brekken og Sønner. He is not gracious after the company won on a number of points in a year-long dispute with Veidekke. – We have worked as hard as we can to keep our heads above water. We have to spend a few years slowly but surely building the company back up. The need for closure after the legal dispute with Veidekke has become great. Because just listen here: The court has decided that Veidekke must pay NOK 26.8 million to the company. At the same time, they have to pay NOK 19.9 million to Veidekke. On top of it all, they have to pay their own legal costs. The final sum? NOK 63 million. The victory thus cost the company NOK 56.1 million. – It is a bill we have settled over time, and not a bill we are sitting with in our lap now. We had hoped to get some court costs covered, but we didn’t get that, says Runar Brekken to news. The dispute has previously been discussed in, among others, Finansavisen and Tungt.no. This is what they fought over. It has been an extensive case between the parties. 34 days have been spent in the Court of Appeal. In total, the court has had to deal with 38,000 pages of documents, in addition to a number of computer files and supporting documents. The case between Veidekke and Alf Brekken og Sønner includes a number of claims. In total, the dispute includes seven claims where Alf Brekken and sons believed they were entitled to more payment. Here, Alf Brekken and sons believed that they were entitled to almost NOK 23 million. Veidekke, for his part, believed that the company was only entitled to 16.9 million. The Court of Appeal concluded that Alf Brekken og Sønner had a claim for NOK 21.1 million – i.e. NOK 4.2 million more than what Veidekke assumed. The dispute also dealt with 12 additional claims. In total, Alf Brekken and Sønner believed that they were entitled to almost NOK 34.3 million. Veidekke believed that the claim was far too large, and that the company was only entitled to close to NOK 4 million. After reviewing the case, the Court of Appeal concluded that they should be paid NOK 8.8 million for these claims. Veidekke had also made a counterclaim. Among other things, they would get back expenses they had linked to the hiring of crew and machinery, accommodation and machinery. In total, they demanded NOK 20.4 million. Alf Brekken and Sønner, on the other hand, believed that they were only entitled to NOK 1.3 million. Here, the Court of Appeal concluded that Alf Brekken and sons had to pay NOK 19.9 million. Legal costs The Court of Appeal decided that the parties had to pay their own legal costs. In total, the case has cost the parties around NOK 111 million. Of that, Alf Brekken and Sønner must pay around NOK 63 million, while Veidekke’s share is NOK 48 million. The dispute over a project in Lofoten Striden’s core is the work that was done in connection with a race safety project in Lofoten. In addition, two breakwaters were also to be expanded and reinforced. In August 2012, Veidekke received the assignment from the Norwegian Public Roads Administration. In October of the same year, Veidekke and Alf Brekken and sons entered into a subcontract for blasting and work with moving masses. But problems arose. Among other things, there must have been significantly more loose material than was expected. In addition, Veidekke and the Swedish Road Administration ended up in an argument about the final settlement. Some of this money Alf Brekken and Sønner believed they were entitled to. But Veidekke was not interested in paying. Thus began the rounds in court. After an initial claim of NOK 10.7 million from the Lofot contractor, Veidekke chose to file a counterclaim. Then the tax meter from the lawyers started to run. After going through all the documents related to the work, and a round in the district court, Alf Brekken og Sønner demanded almost NOK 95 million from Veidekke. Veidekke, for his part, thought the company was only entitled to NOK 3.5 million. At the same time, Veidekke demanded that Alf Brekken and Sønner should pay them NOK 20.5 million. This was money Veidekke had advanced to Alf Brekken and Sons. – It is their morale that I am surprised by. We are pleased to have received the approval we have received. But the worst thing is that we have tried to go high up in Veidekke’s system to find solutions, but no one would talk to us. If they had done their job, both we and them would have saved a lot of money, says Runar Brekken. Have tried to find a solution Veidekke, for his part, believes they have done their bit to find an amicable solution. According to the judgment, they have submitted a proposal for settlement several times. – Because the proposed solution was never accepted by Alf Brekken og Sønner, legal proceedings were unfortunately necessary, writes Ronny Lund in an e-mail to news. He is a partner in the law firm Wiersholm and has represented Veidekke in court. Veidekke has been submitted to criticism from Runar Brekken. It is Lund who answers on behalf of the company. The lawyer fully understands that the legal process has been demanding and expensive for Alf Brekken og Sønner. – It has also been the case for Veidekke. At the same time, it has been necessary for Veidekke to defend himself against claims and demands that have lacked the necessary realism, and for which the courts have now concluded in two instances that there was no basis for them. The cost order in the two courts is a result of the case not having previously been able to be resolved on a realistic level, he writes. On the brink of bankruptcy It has been a long process. In 2018, Runar Brekken stood up and told about a company that was on the brink of bankruptcy due to a lack of final settlement. Among others from the Norwegian Public Roads Administration. – At the beginning of 2016, we were left with a pile of bills of over NOK 100 million, and the account was empty. It is against all odds that we managed to save the jobs, said Runar Brekken. The company has lost large sums in the disagreement with Veidekke. Photo: Gisle Forland / news For the leader there were only two choices; to give up or to give gas. Runar Brekken saved both the family business and 130 jobs through what he refers to as a storm. He made the turnaround possible through large private loans, the sale of the family car, mortgaging his own home and assistance from close friends. But what he didn’t say anything about then was the dispute with Veidekke. Alf Brekken og Sønner had already summoned Veidekke in 2016 – and the process was ongoing. Costly disagreements The fact that disputes arise in the construction industry is nothing new. In 2018, Samfunnskonomiksanalyse carried out a calculation of the costs of disputes in the construction industry. They estimated that there are always disagreements over several billion kroner in the industry. And disputes about payment lead to more bankruptcies. In 2018, one of Northern Norway’s largest construction companies, M3 Anlag, was declared bankrupt. Part of the background was a dispute over settlements after several transport projects. – It is not unusual for a disagreement to arise between the subcontractor and the main contractor about the remuneration in a project. As a clear general rule, however, such cases are resolved amicably, writes Ronny Lund. Will not cooperate in the future For Alf Brekken and Sønner, an external investor has been absolutely essential for them to have the finances to deal with the litigation. – It is a special case. And it is special that we have received so much support, but so little value for money, says Runar Brekken. – Has it been worth it? – It has not been worth it. We have spent more than what we have received if you count in kroner and øre. But at the same time, there is something wrong with standing up for what you say. It is good to be able to show that you have had clean flour in the bag. – Do you want to work with Veidekke in the future? – No. And I will be recommending to anyone who asks me not to do it. Will not comment on allegations Veidekke, on the other hand, says they are concerned with good relations with all their partners. – Veidekke uses subcontractors in almost all projects where the company is involved. In all projects, we seek a good and trust-based collaboration. This was also the case in this project, where Veidekke – as a result of, among other things, strained finances at ABS throughout the project – took very extensive and significant measures to support ABS both financially and organisationally, writes Lund, and continues: – Veidekke records that it from Alf Brekken og Sønner there have been further, and in part very serious, statements, allegations, characteristics and other things in traditional and social media repeatedly after the sentencing. There have been many such claims during the process as well. Veidekke will hold firm by failing to comment on these specifically, but will only emphasize that they appear to be groundless and unreasonable.
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Alf Brekken and sons won the battle against Veidekke – news Nordland
