Need Staff Training During Lockdown? No Problem!

Whilst COVID-19 has caused immeasurable harm, it has at least taught us one good thing: people can work from home without a loss of efficiency.

But what about staff training?

Video conferencing (think Zoom, MS Teams, etc.) is being used to great effect. Remote working and meetings have saved time and cut down on travel costs. The sharing of information via webinars has also seen a huge upsurge in recent months.

We at Claims Class pride ourselves on supporting needs of our customers. This was why we introduced e-courses for people who found it difficult or impossible to attend our live workshops. We now have e-course students in every corner of the World.

Travel restrictions and self-isolation have meant that our In-House Training Workshops for companies had to stop for a while. However, we have decided that COVID-19 is not going to beat us so we are now offering our workshops to companies via webinar.

Webinar / online training has many features and advantages:

  • Attendees may be together in one place or sign in from separate locations.
  • Training sessions may take place on consecutive days or otherwise, to suit our your requirements.
  • Training sessions may be full, half-day or shorter regular sessions to suit your requirements.
  • Q&A sessions are be available at the end of each module. Attendees may ask questions either by voice or message.
  • You will be provided with training materials to distribute to the attendees.
  • CPD certificates will be issued to attendees.
  • There is no travel time or cost of transport/accommodation in training fees. This reduces the cost to you as we can deliver the training from our Middle East base.

We offer the following courses to companies:

  • Practical Use of FIDIC - Working under FIDIC contracts has unique challenges. This course will give your team the skills to navigate the contract successfully.
  • Construction Claims- whether you are an employer, consultant or contractor, this course covers everything on identifying, preparing and responding to construction claims.
  • The Perfect Claim - This course guides you through preparation of a claim from start to finish, sharing the secrets to ensuring your claims are successful.
  • Understanding Claims Under FIDIC  - give your team the clarity and knowledge they need to handle claims under FIDIC.

We tailor our courses to suit  your particular requirements. We are also able create bespoke courses to address your the specific needs.  Get in touch with us to discuss any specific challenges you may face.


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.

Between them, HKA and ARCADIS cite the following as major causes of disputes:

  1. Contract requirements were poorly drafted.
  2. Errors or omission in the contract documents.
  3. Contract management and/or administration failure.
  4. Failure to serve appropriate notice under the contract.
  5. Parties failing to understand and/or comply with its contractual obligations.
  6. Claims were spurious, overinflated, opportunistic and/or unsubstantiated.
  7. Level of skill and/or experience.

ARCADIS say that the average dispute value globally in 2018 was around US$20M and the average length was 17 months. Dr. Nael Bunni advised at the FIDIC conference that the cost of arbitration is between $150,000 and $200,000 per day. So if an average arbitration lasts 10 days, we are looking at a cost of  $1.5M to $2M to resolve the dispute. The Dispute Review Board Foundation calculate that this may be 10-15% of project value. It doesn't take a genius to work out that if a project ends up in dispute, any profit margins will be eaten up by the dispute itself.

If we revisit the 7 major causes of disputes listed above, we can see that none of these relate to design, engineering or construction problems. All seven relate to poor contract management and administration. In fact, ACADIS’ report says that “Owners/Contractor/Subcontractors’ failure to understand and/or comply with contractual obligations became the top cause of construction disputes for 2018”.

So, what can companies and individuals do to fix this problem?

Well, I would suggest that addressing the last item on the list i.e. “Level of skill and/or experience” would fix all the other problems.

How can we ensure then, that companies and individuals increase their levels of skill and experience? Well, that's where investing a small amount of money in staff education and training will pay dividends. It doesn't take long for increased skills and experience to lead to increased efficiency. This in turn will show up on the bottom line of a project. Individuals who can demonstrate to a company that they have a high level of skill and experience are assets. Individuals will command more senior positions and higher salaries than those without such skills.

Now for the Claims Class promotion that I promised earlier. If you are looking for training for yourself or your team, there are a number of ways we can support you:

  • delivering education and training to companies and individuals:
  • training on the FIDIC forms of contract, claims, contract management and contract administration:
  • training through in-house training workshops, public workshops and self-study e-courses;
  • deliver courses that are created, presented and tutored by experts, not only in their specialist fields, but in training and education;
  • have courses to suit all levels at prices to suit all pockets and budgets;

We have trained hundreds of satisfied construction professionals. If you want to become one of them, take a look at our e-courses or in-house training options or get in touch today to find out more about our personalised courses.


COVID-19

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.

But since then things have changed drastically. Some countries are on total lockdown with people having to stay at home. Many countries have imposed travel bans. So the effects of COVID-19 are now extreme and likely to last for a long time.

Reconsidered Options

As a consequence, I thought it would be sensible to examine the options available to the Parties as the situation  develops further. Again, I shall look at the provisions of the FIDIC Red and Yellow Books.

Suspension

The Employer may consider that if the Contractor is not able to proceed with the Works for the foreseeable future, it may be sensible to suspend the Works. This may minimise any cost which may become due to the Contractor. Sub-Clause 8.8 (Suspension of Work) allows the Engineer to issue a suspension instruction. The Contractor would then be obliged to protect, store and secure the Works against deterioration, loss or damage. This would effectively ‘mothball’ the project until the Employer decides to lift the suspension. In a case of suspension, the Contractor would be entitled under Sub-Clause 8.9 (Consequences of Suspension) to an extension of time and the payment of Costs including mobilisation and demobilisation costs. The Employer must weigh up the options here.

However, sub-Clause 8.11 (Prolonged Suspension) allows the Contractor to terminate the Contract if the suspension affects the whole of the works and the suspension period continues for more than 84 days. We are unsure how contractors will react as and when things return to normal and operations may be resumed. Presumably, many of them will be willing to pick up where they left off.

FIDIC does not provide any options for the Contractor to suspend the Works under the circumstances arising from COVID-19.

Termination

There are two clauses in FIDIC which give the Employer entitlement to terminate the Contract. Sub-Clause 15.2 (Termination by Employer) allows the Employer to terminate because of various acts of default by the Contractor. In my opinion, it cannot be said that inability to progress the works in the circumstances of COVID-19 is a default of the Contractor. This is therefore inapplicable.

Sub-Clause 15.5 (Employer‘s Entitlement to Termination) however, allows the Employer to terminate for his own convenience by giving 28 days’ notice. Nothing can be sensibly predicted at the moment. But as things progress, some employers will simply decide not to proceed further with the project, or at least not for some considerable time.

My earlier blog suggested that it is uncertain whether COVID-19 constitutes a Force Majeure event under FIDIC. If the Parties agree that it does, Sub-Clause 19.6 (Optional Termination, Payment and Release) provides that if the Works are prevented from progressing for a period of 84 days or for multiple periods of 140 days by reasons of Force Majeure, then either party may terminate the Contract.

Sub-Clause 19.7(Release from Performance Under the Law) provides that ‘if any event or circumstance outside the control of the Parties arises under the Law which makes it impossible or unlawful for either or both Parties to fulfil its or their contractual obligations … the Parties shall be discharged from further performance…’.  This may become applicable in circumstances whereby governments have introduced measures  which havemade further performance impossible. It then becomes a further reason for termination by either party.

Finally

The circumstances arising from COVID-19 have never been experienced before, or at least not within my - long! - lifetime. They are drastic and far reaching. Whilst I have given my opinion on the applications of the FIDIC contracts to the situation, this has been from a purely contractual point of view. In my opinion, the FIDIC contracts do not really envisage such a situation.

That said, in a situation as serious as this, the Parties must think outside the box of the contract. It is important to find ways to work together to safeguard the personnel involved. Comply with government rules and regulations and seek ways to manage the project to the best abilities of both Parties. The ability to maintain progress and complete on time may well be out of the control of both Parties. Contractors may be expending substantial additional costs. They no doubt will suffer from cash flow problems and will be powerless to control this. In short – both sides of the contracting fence will undoubtedly suffer. In my opinion, it would be unfair for either Party to attempt to gain any advantage from the situation.

Don’t forget that, provided both parties are in agreement, contracts may be amended at any time. Despite what the contracts say, I would encourage all involved to seek to reach agreement on a course of action. Ideally one which will be the least harmful to the parties and the project.

Enjoying articles from Claims Class? Join our mailing list and receive new articles straight to your inbox or learn more through our e-courses, available at basic, intermediate and premium levels.


Force Majeure

The Perfect Claim

Exciting news: We spent a large chunk of 2019 developing a new course, The Perfect Claim. Now, we’re ready to share it with you in 2020. But first, let’s take a step back. Why the need for another course?

Well…

Read more


Case Study: In-House Training for Government Employees in Africa

As well as delivering online e-courses, we offer in-house training for companies. We were approached by the government department responsible for roads and highways in an African country. The department was experiencing several problems related to claims and wanted to train their in-house staff on how claims should be managed effectively. The problems were:Read more


Q&A: Delay Analysis

In partnership with the CIOB, Claims Class is running a series of monthly webinars on construction claims. The webinars cover some of the modules Construction Claims e-courses. In this webinar, we took a look at preparing a delay analysis.

At the end of each webinar, we invite questions and send the attendees answers to any questions that we do not have time to answer during the webinar. We've received good feedback from the two previous blogs on Q&A: Contract Administration and Q&A: Types of Claim.  So, I've decided to do the same for this month's blog. The following are questions and answers from the webinar on Delay Analysis.Read more


Q&A: Types of Construction Claims

In partnership with the CIOB, Claims Class is running a series of monthly webinars on construction claims. The webinars are a condensed version of our Construction Claims e-courses.

At the end of each webinar, we invite questions and send the attendees answers to any questions that we do not have time to answer during the webinar. I thought that this would provide some useful insight to our blog readers. The following are questions and answers from the webinar on Types of Claim.Read more


Q&A: Contract Administration for Claims

In partnership with the CIOB, Claims Class is running a series of monthly webinars on construction claims. The webinars are based on our Construction Claims e-courses and workshops and have attracted between 150 and 300 attendees per session.

At the end of each webinar, we invite questions and send the attendees answers to any questions that we do not have time to answer during the webinar. I thought that this would provide some useful insight to our blog readers so, the following are questions and answers from the webinar on Contract Administration for Claims.Read more


5 Tips for Success When Claiming for Variations

A question that I am often asked during CPD talks and claims training courses is “is it necessary to submit claims for a variation?”. Unfortunately, I am going to have to give a lawyer’s answer to this and say that “it depends”.

If the party responsible for administering the contract follows the procedure set out in most forms of contracts for instructing variations, then the answer is “no”, because the variation has been acknowledged and it will either be measured and evaluated as part of the remeasurement on a remeasureable contract or as a separate evaluation leading to a change of the contract price of a lump sum contract.Read more


An Explanation of 'Time at Large'

A blog reader asked for an explanation of “time at large”. This is not something that I have personally come across in practical terms. For the advice that I am about to give, I am indebted to my ex-boss, Roger Knowles. Roger provides an explanation in his book, 150 Contractual Problems and their Solutions. Roger explains it arises:

"when a contract is entered into with no period of time fixed for completion. Where this occurs, the contractor’s obligation is to compete within a reasonable time."

I have never experienced such a situation and I expect that when it does occur, it will be on Read more