construction 2020

Reflections on Construction in 2020

To say that 2020 has been an unusual year would be an understatement. Not just for the construction industry, but for all of us around the world. Despite the challenges, things are not entirely doom and gloom. We have all learned in one way or another from the COVID-19 experience. Sometimes we need a challenge to force us to think about alternative ways of doing things.

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final account disputes

Why do Final Accounts lead to Disputes?

I recently provided advice on a dispute of US$250M. This sum includes variations, prolongation costs, acceleration costs, disruption costs and delay penalties. The dispute crystalised when the contractor submitted his final account. This is a familiar occurrence. In fact, a large proportion of disputes occur when the project is either nearing or after completion.

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Construction contract FIDIC 2017

How Does FIDIC 2017 Affect Claims?

I guess like many of you, I have not had the opportunity to examine the 2017 editions of the FIDIC contracts in much detail, because as yet, I have not come across any projects that are using them. This situation will, however, gradually change. As it does, we will need to know what has changed and how it has changed. As such projects reach final account stage there will undoubtedly be claims to resolve and disputes to settle. I have recently been doing research for a forthcoming book, so thought it would be worthwhile to highlight the changes from a claims perspective.

Employer's Claims

Sub-Clause 2.5 (Employer’s Claims) has been deleted in the FIDIC 2017 editions. Employer’s claims are now dealt with together with Contractor’s claims under Sub-Clauses 20.1 (Claims) and 20.2 (Claims For Payment and/or EOT).

The Employer is now obliged to give a notice of claim no later than 28 days after the event or circumstances giving rise to the claim. This has now become a condition precedent to entitlement for both Parties.

If the Engineer considers that a notice of claim was not given within the stipulated 28-days, he/she is obliged to give a notice of such within 14 days of receipt of the notice of claim. If the Engineer fails to do so, the notice will be deemed to have been given within the stipulated time. The responding Party may also give a notice to the Engineer if they consider that the notice of claim was out of time.

Claims for Payment

Sub-Clause 20.2 (Claims For Payment and/or EOT) is a little more descriptive of what is meant by “a fully detailed claim”. It requires the claimant to include ‘a detailed description of the event or circumstances giving rise to the Claim’. Also, ‘A statement of the contractual and/or legal basis of the Claim’ must be provided. These requirements are just a matter of good practice. Nevertheless, previously, many claimants did not include such basic information within their claims.

The period for submission of the fully detailed claim has been extended from 42 days to 84 days. But, failure to submit ‘A statement of the contractual and/or legal basis of the Claim’ within this time period will result in the notice of claim becoming lapsed. FIDIC is not clear on what this actually means. However, I believe that the intention is that the claim becomes time-barred.

The Engineer is obliged to consult with the Parties in an endeavour to reach agreement. If agreement is not reached, the Engineer must make a fair determination within 42 days of receiving the claim or additional particulars of the claim. If there is no agreement to extend this period, failure to issue a notice of either agreement of determination shall be deemed to be a rejection of the claim. The claimant may then refer the matter as a dispute. Previously, the Engineer only had to respond to the claim within 42 days. No time limit existed on the period for agreement or determination. Now they have to bring the matter to a resolution within 42 days. Six-weeks is not an onerous time to achieve this, provided that the Engineer takes action immediately upon receiving the claim.


Disputes & Arbitration

Clause 21 (Disputes and Arbitration) is solely concerned with disputes. It distinguishes between claims and disputes, reflecting the fact that claims only become disputes if they cannot be agreed. They should not be regarded as being related.

The clauses dealing with claims and determinations have become much wordier and much more complicated. To my mind, they are not easy to follow or to understand. This seems to be a departure of FIDIC’s intention to write contracts for engineers rather than for lawyers. Personally, I see this lack of clarity as a route to contention.

Having said this, it is apparent that FIDIC have attempted to strengthen the procedures relating to claims and responses. If we consider the amount of time-consuming and costly disputes which arise because the Parties have not complied with either their obligations or with good practice when dealing with claims, this is definitely a step in the right direction.

Will it mean more work for contractors or engineers?

I don’t think that the changes require any more work than should have been put in under the 1999 editions. However, the consequences of non-compliance are now more severe. Both contractors and engineers need to get their acts together. They must stop thinking that they can ignore their obligations to manage claims in accordance with the Contract without consequences.


Find out more about our FIDIC e-courses over on our e-courses page.

Progress Updates – Fact or Fiction?

Contractors often shoot themselves in the foot when preparing progress updates for the employer’s team. Many times we see months worth of updates which present a rose-tinted view of project progress.

Whilst it is tempting to keep reporting good news month-on-month, be wary. A less than competent consultant may believe such reports because good news will not involve them in additional and troublesome work. However, you could be causing problems for yourself further down the line.

Problems frequently arise when the contractor needs to submit a claim for an extension of time. It becomes very difficult for him to subsequently tell the employer’s team: “I know we kept telling you that there was no delay to the completion date, but actually there is and it’s not our fault, so please can I have an extension of time.

A progress update, as-built programme or updated programme (all different names for the same thing) is created using the latest agreed programme. It uses planned start and finish dates plus the percentage of progress for any activity started but not finished. The logic contained in the programme and the programming software will then predict the completion date based on progress to date.

Before I specialised in contractual matters and claims I was a project manager for both contractors and consultants. When my planning team produced a progress update, I wanted only one thing from them and that was…


If the update predicted early or on-time completion then I knew that we were doing okay. But if the update was predicting a delay, then I needed the planners to tell me the cause, or causes, of the delay so that we could to take action.

If the delay was caused by us or was due to something that we were responsible for under the contract, we had to find ways to recover the delay. This could mean working longer hours or mobilising additional resources.

But what if the delay was caused by the employer or by something which is at the employer’s risk under the contract? In this case, we needed to identify the cause, submit the necessary notices and make preparations to submit a claim.

So, what would I report to the employer’s team in our monthly progress reports under such circumstances? Again…


Many contractors will not agree with this tactic and will be reluctant to tell the employer’s team that the project is in delay for any reason at all. The contractor should admit to his own delays but explains the steps that he is taking to mitigate. Generally, the employer’s team will accept that delays do happen and that the contractor is being proactive about dealing with them. Telling the employers team about predicted delay will only support subsequent claims. Particularly when the cause is something which will entitle the contractor to an extension of time.

This, of course, only works if the contractor is not going to just bury his head in the sand and hope that the delay will go away. Trust me, it probably won’t. The contractor must actually take mitigating action to recover their own delays. Make sure you send the necessary notices and submit a claim without undue delay.

So, what is the alternative to telling the Employer’s team THE TRUTH? Manipulate the programme so that it no longer predicts a delayed completion date? Unfortunately, this is what many contractors do to avoid giving the employer’s team any bad news.

The fact is that this knee-jerk reaction is not sustainable through many progress updates. It will not support any legitimate claims for extensions of time seems lost on such contractors.

Fact or fiction? I will leave you to decide the best way.

Understanding the importance of contract administration is vital to avoiding claims. Discover more with our Understanding Construction Claims Under FIDIC E-course.

FIDIC Notices

FIDIC 1999 Notices - Andy Hewitt's Latest Book

At the end of 2019 I was working with a contractor-client on several extension of time and additional cost claims. I needed to demonstrate that the contractor had complied with the contractual notice provisions in FIDIC.

This client had sent some notices. In most cases though, these didn’t comply with the contract requirements. In many cases they were completely meaningless as notices.

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Letters Abbreviations

When Should You Use Abbreviations and Acronyms?

I have one piece of simple advice about using abbreviations and acronyms. Whether in claims, responses, contractual letters, reports or any important communications on your project:

Do not use them….

at all…


Let’s look at a real-life example of why this is so important.

Our consultancy business, Hewitt Decipher Partnership, was recently appointed by a contractor. Our job was to prepare claims on behalf of the contractor for an extension of time and additional payment on a large project.

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Payment for Work Not in Accordance with the Contract

A former Claims Class student asked my advice on a matter which I thought would be an interesting case study to share. The Contract conditions are FIDIC and the question around non-payment of work which was not in accordance with the contract.


Each month the Engineer makes deductions in the payment certificate for Non-Conformance Reports under Sub-Clause 14.6 (Issue of Interim Payment Certificates), sub-paragraphs (a) & (b).

The Contractor does not contest the Non-Conformance Reports. They state that the defects will be rectified. A problem being that this is likely to take some time to achieve.

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Avoid Construction Disputes

How Education and Training Avoids Disputes

I don't usually have much to say about education and training or attempt to promote our Claims Class courses through our blogs. But, this month I am going to make an exception and for good reason. Recent reports demonstrate that education and training will avoid time-consuming and costly construction disputes.

HKA’s report, Claims and Dispute Causation – a Global Market Sector Analysis and ARCADIS’s Global Construction Disputes Report 2019 are both pretty scathing. Both point to a lack level of knowledge exhibit when it comes down to contractual matters and claims.

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COVID-19: Options for Contractors, Engineers and Employers

In my last blog, I discussed the effects of COVID-19 under the FIDIC Red and Yellow Books. Particularly whether contractors are entitled to claim for an extension of time and/or costs.

My advice was just a few weeks ago. At that time, some contractors were anticipating delays. Firstly caused by supply chain problems associated with plant, goods or materials sourced from China. Secondly by the travel restrictions which were in place. My thoughts were that,  the Contractor will be entitled to an extension of time provided he can demonstrate delay to the Time for Completion and/or the incurrence of Cost. He may also be entitled to claim for additional payment for Cost incurred.

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Coronavirus and Construction - Is the Contractor Entitled to Claim?


The global hot topic this month is definitely the coronavirus. It's affecting many construction projects.  Labour, materials, plant or equipment are coming from China (or other affected countries) and supply has been delayed. So what do you do if you're a contractor in this situation? Are you entitled to make a claim? depends on your particular contract, but possibly.

I know that this is a bit of a lawyer’s answer, but it really does depend on several things. Let’s however, have a look at what the FIDIC Red and Yellow Books, 1999 Editions, have to say on the subject.Read more