interim claims

10 Things Construction Gets Wrong When it Comes to Claims

Inadequately expressed claims are one of the leading causes of time-consuming and costly disputes. Avoid common mistakes to ensure acceptance of claims.

In this post, we set out ten common reasons that claims end up as disputes and offer best practice tips so you can ensure you do better. Take a look at the following, have you fallen foul of them? Are you constantly looking out for them so you can avoid them?

Common Mistakes

  1. Contractors wait until the end of the project to submit claims, instead of submitting claims when entitled to, as the project progresses.
  2. Contractors include several delay events into a single consolidated claim instead of preparing separate claims for each delay event.
  3. Contractors do not give notices of claim within contractual timeframes, and notices do not contain necessary information.
  4. Claims do not contain an adequate examination of cause, effect, and entitlement to justify the claim.
  5. Claims are not adequately substantiated to prove that the claim is just.
  6. Engineers and contract administrators do not follow their contractual obligations to respond to claims and attempt to reach agreement.
  7. Both claims and responses to claims are poorly expressed, so the recipient has difficulty in understanding the claimant or respondent’s positions.
  8. Delay analyses to demonstrate extensions of time are not performed following good practice.
  9. Cost claims are poorly demonstrated and substantiated.
  10. Those tasked with preparing and responding to claims are inadequately trained and qualified.

Whilst very common mistakes, these are all avoidable. They are all things you can keep an eye out for and minimise or even eliminate to ensure project success.

If you would like to learn how to submit successful claims and achieve quick resolution on projects, take a look at our e-courses.


Construction Claims, Contract Admin

Will Your Contract Admin Stand Up to Future Claims?

Good contract admin (or administration) is key to any successful project.  If a claim is to succeed, it must contain certain essential elements: Cause, effect, entitlement and substantiation.

In other words:

  1. What happened that gave rise to the claim.
  2. The dates that various events occurred.
  3. The effect of delays on the time for completion
  4. In the case of incurred costs: Are they appropriate? Are they calculated correctly?
  5. Does the contract contain entitlement to compensation?
  6. Is every statement or fact in the claim substantiated?

We should also remember that the onus is on the claimant to prove that the claim is just. It is not the respondent’s job to do this when reviewing the claim.

To achieve this, the contractor’s contract administration systems must be able to support future claims. If they are not, it will be difficult or impossible to prepare a claim that fulfils these criteria.

Contract Administration: Things to Consider

Some things to consider in this respect are as follows:

  1. Is your record keeping adequate and can the records be easily retrieved?
  2. Are important and formal records drafted so that they may be understood by a person not familiar with the project?
  3. Are notices that are required by the contract given within the prescribed time frames? Do they contain the correct information?
  4. Has a baseline programme been established? Is it prepared in line with good practice?
  5. Are revised programmes prepared when circumstances dictate?
  6. Are progress updates accurate? It is difficult to subsequently claim a delay if progress has been reported showing no delay.
  7. Do monthly reports adequately record the events, and may they be understood by a person not familiar with the project?
  8. Are daily records of resources deployed to the project being maintained and submitted to the engineer on a regular basis?
  9. Do you have adequate and properly qualified and experienced resources to create and maintain efficient contract administration?
  10. Do you have adequate and properly qualified and experienced resources to prepare your claims?

If you can answer yes, to all these questions, there is a good chance of success for your claims. If not, then you may need to reconsider your approach.

For more help with these subjects, why not consider joining one of our e-courses?


FIDIC 2017: What You Need to Know Now

It is now 5 years since the FIDIC 2017 editions of the Red, Yellow and Silver Books were published. As anticipated, it’s taking the industry some time to get on board and adopt these latest editions on projects.

Change Can Be Uncomfortable....But it's Inevitable

Nobody likes change. Employers and engineers are no different. It can be uncomfortable and it takes time and effort to take effect. But, as time moves on more and more projects will move to the FIDIC 2017 editions and it's critical that project teams understand these contracts.

I also suspect that Read more


Increases in Material & Other Costs

The consultancy side of our business has recently received enquiries along the lines of the following. “We have come to the end of our project and are facing a huge loss due to increases in the cost of materials and shipping and because of measures that we have had to adopt to control COVID-19. What can we do?”

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FIDIC 2017 Notices

A guide to the requirements, content and composition of notices under the FIDIC 2017 Red, Yellow and Silver books

Some of the biggest mistakes that contractors make when it comes to claims under FIDIC 2017 relate to notices. Such failures include failure to:

  • Give notices when obliged to do so by the contract.
  • Give notices within the time frames specified in the contract.
  • Properly identify communications as notices.
  • Record the necessary information within notices.
  • Cite the contractual clause under which the notice is given.
  • Address and/or copy the notice to the correct party.
  • Deliver to the notice to the place specified in the contract.
  • Deliver to the notice by the means of communication specified in the contract.

Read more


Claims class student online training

Claims Class Helps Student Secure US$1 Million

This month I am going to allow myself to pat myself on the back, because of a success story from a recent Claims Class student.

A gentleman from an African country contacted me to discuss enrolling on one of our claims courses. He had found out about Claims Class after purchasing a copy of my Book FIDIC 1999 Notices. This is what he told me.

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Claims class student online training

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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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…

ever!

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.

Background

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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