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?

Well...it 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


FIDIC Amendments and The Golden Principles

We have all seen it. We receive what we assume is a FIDIC form of contract. But when we examine its contents or the Particular Conditions, we find it has been subject to amendments and changed considerably. FIDIC amendments we often see include:

  • Clauses struck out, usually those that give the contractor rights and remedies.
  • New clauses appear which are often punitive toward the contractor.
  • The remeasurable Red Book changes to a lump-sum contract.
  • Time-frames may have been reduced for the Contractor’s actions and extended. Alternatively, time-frames vanish altogether for the Engineer and Employer’s obligations.

Added to this, the changes and amendments are often poorly drafted and the final version contains ambiguities and conflicts.

So what we end up with is not what FIDIC intended. In short, it does not do what it says on the tin.

Employers and Engineer’s make these changes in an attempt toRead more


Construction and Contract News 2019

We are looking ahead to 2020 and back on the past year. What has changed and what should we be looking out for in the world of construction contract and claims? We take a look in this round-up of construction and contract news from around the world…

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Claims Class

How to Manage and Minimise the Submission of Spurious Claims

The Claims Class blog has attracted loyal readers over the years. We get lots of comments as well as questions on issues that our readers are dealing with on their projects. And this often gives me inspiration for new articles. A reader recently told us that he spent a lot of time dealing with inadequate claims. He asked how he could effectively manage and minimise the submission of spurious contractor's claims. So here are my thoughts...

Consultants need to spend a lot of time and effort to manage and respond to contractor's claims. So it's worth making sure that you spend this time working on justifiable claims. Don't waste time reviewing and responding to claims where the contractor has no entitlement, or to those that have not been submitted in an appropriate manner.

Remember that the onus is on the claimant to prove the case. Most contracts require consultants toRead more


responses and determinations

The Engineer's Responses and Determinations: What Should be Included?

Earlier this year I presented a CPD talk to RICS members in Dubai on the topic of Engineer’s Responses and Determinations. I usually like to kick things of with a poll and I asked the group the following questions:

How many people have experienced a situation where the Engineer does not respond to a claim within the contractual time-frame? Almost everyone confirmed that they had.

How many people have experienced a situation where the Engineer’s response has done little to resolve the claim? Again, almost everyone confirmed that they had.

How many people have experienced a situation where the Engineer’s response has caused the matter to escalate to a dispute? Over 50% of attendees confirmed that they had.

How many think that failures of the Engineer to carry out their contractual obligations on claims is helpful to projects? No one thought that this helped projects.

This is clear feedback from RICS members that the Engineers often do not perform their obligations. This has a detrimental effect on projects.

So, what should Engineers be doing to help projects when responding to claims? Well, as usual, the contract provides the answers, so let’s have a look at what the FIDIC Red Book has to say on the subject.Read more


Construction contract

How to Ensure you Avoid Costly and Time-Consuming Disputes on your Projects

We all want to avoid disputes on our construction projects. But it seems we fail to learn from lessons of the past. ARCADIS have just published their annual Global Construction Disputes Report 2019. It makes interesting, but, not altogether surprising reading.

This year, the top three reasons for disputes are:

  1. Owner/Contractor/Subcontractor failing to understand and/or comply with its contractual obligations;
  2. Errors and/or omissions in the contract document;
  3. Failure to properly administer the contract.

Some other interesting noteworthy observations are: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


How to Ensure a DAB is Formed Correctly

A blog subscriber recently asked for some advice on the setting up and organisation of a Dispute Adjudication Board (DAB). They specifically wanted to know what to do if one of the parties is trying to frustrate the procedure by refusing to agree to the appointment of the DAB. The following advice is relates to the FIDIC contracts. However, it may be equally applied to other forms of contract that have dispute board provisions.

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Notices: Should a Contractor submit if he is not sure whether he intends to make a claim?

A Claims Class blog follower recently asked for advice on the correct interpretation of FIDIC Sub-Clause 20.1 (Contractor’s Claims).  What happens in situations where the Contractor is not sure if he will submit a claim or not.

Often the Contractor becomes aware of an event that may cause delay, additional Cost or entitlement for additional payment. At that time, he may not be aware of the final effect of the event.
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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