Archive for the ‘FIDIC’ Category

Contractors! Are Your Claims Responded to Correctly?

EC Harris’ (now Arcadis) Global Construction Dispute Report has, for many years, cited inadequately expressed claims as being one of the top five causes of disputes in the construction industry.

Although the reports do not specifically mention it, I suspect that inadequately and unfair determinations should also be somewhere near the top of this list. This is because over and over again, attendees at our courses complain that their claims have not been responded to either fairly or in a meaningful way.

So, what is the problem?

If we look at the FIDIC forms of contract as being fairly typical of the widely-used forms of contract, we can see that the Engineer has the following obligations when responding to claims:

  1. Respond to the claim within 42 days – Sub-Clause 20.1 (Contractor’s Claims);
  2. In a case of rejection, respond with detailed comments – Sub-Clause 20.1 (Contractor’s Claims);
  3. Include sums that the Engineer considers to have been reasonably substantiated as being due in interim payment certificates – Sub-Clause 20.1 (Contractor’s Claims);
  4. Consult with each party to attempt to reach agreement – Sub-Clause 3.5 (Determinations);
  5. Make a fair determination in accordance with the Contract – Sub-Clause 3.5 (Determinations);
  6. Give notice to parties with detailed particulars – Sub-Clause 3.5 (Determinations).

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Practical Use of the FIDIC Contracts Intermediate E-Course | Accepting Trial Students!

You may have seen last year that Claims Class has stepped into the world of online learning and to kick things off, we launched our Construction Claims Basic and Construction Claims Intermediate E-Courses in 2017.

We’re starting 2018 on a high and our second course, the Practical Use of the FIDIC Contracts Intermediate E-Course is ready to go and we’re running a trial launch.

Before we get into the details, if you’re thinking that you would rather not be a trial student then let me reassure you. Whilst this is a trial launch, all video content, resources, assignments and tutor support will be delivered EXACTLY as they would be if you were to sign up during the official launch. During the trial period, we simply want to ensure that we have created: (more…)

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The Second Edition of the FIDIC Rainbow Suite has Arrived

At a packed International Contract Users’ Conference held in London on 5-6 December 2017, FIDIC finally unveiled the Second Edition of the 1999 Rainbow Suite, Red, Yellow and Silver Books.  Whilst the Second Edition largely follows the 2016 pre-release version of the Yellow Book, FIDIC have taken on board some of the comments made by the friendly reviewers, and made a number of important changes.
Why have the Contracts been amended?

FIDIC have explained that the underlying philosophy and core aim behind the update is to achieve increased clarity, transparency and certainty which should lead to fewer disputes and more successful projects. Unsurprisingly, the update also addresses issues raised by users over the past 18 years arising out of use of the 1999 Form and reflects current international best practice. This is why a key theme of the Second Edition is the increased emphasis on dispute avoidance. And the way that FIDIC have chosen to address this is to make many of the contract provisions more prescriptive, setting out step-by- step what is expected from the Employer, Contractor and Engineer.

Dispute Avoidance

FIDIC is seeking to promote dispute avoidance in a number of ways: (more…)

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20 Changes in the FIDIC 2017 Editions From a Claims Perspective

I have just returned from the FIDIC International User’s Conference in London, attended by roughly 400 delegates and speakers, all there to hear about the new editions of the Red, Yellow and Silver FIDIC Forms of Contract. In this blog, I have highlighted 20 changes that are of particular relevance to claims practitioners:

1. The Red Book now has 106 pages of General Conditions as opposed to the 1999 Edition which had 62 pages. The Yellow and Silver books have been similarly increased. The increased volume is said to bring greater clarity and include more procedures to be followed as a matter of contract.

2. The word “Claim” is defined as ‘a request or assertion by either Party to the other Party for an entitlement of relief under any Clause of these Conditions or otherwise in connection with, or arising out of, the Contract or the execution of the Works.’

3. There is a provision to include a percentage in the Contract Data (formerly the Appendix to Tender) and if no percentage is stated, the percentage shall be 5%. (more…)

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How to Deal with Delay Caused by a Nominated Subcontractor

nominated subcontractor

Many years ago when I used to deal with the JCT forms of contract, if a nominated subcontractor delayed the works, the contractor could use this as a legitimate reason to claim an extension of time. Either things have either changed since then, or not all forms of contract take this view.

Under the FIDIC Red Book form of contract, the Engineer may appoint a nominated subcontractor, but once the Contractor has accepted the nomination, he becomes responsible for the actions of the subcontractor and may not claim for any failures of the subcontractor.

In a situation where the Engineer nominates a subcontractor who has submitted a competitive price but is incapable of providing adequate performance (does this sound familiar at all?) it seems inequitable to make the Contractor responsible when he has had nothing to do with the selection of the subcontractor. Does the Contractor have any recourse in such a scenario? Well, sort of, as we will see.

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