Do project consultants (or ‘The Engineer’) understand their obligations with regard to claims?

Over the past couple of weeks, I have presented our new 2-day ‘Understanding Claims Under the FIDIC Contracts’ intensive training course in Abu Dhabi and Doha. Unusually and quite surprisingly, out of a total of 50 attendees, almost all delegates were from contractors or subcontractors.

Does this mean that those appointed to act as ‘the Engineer’ under FIDIC or other consultants appointed to administer contracts consider that they already understand this subject fully, or are Engineers just not interested in dealing with claims properly?

My own personal experience, which was supported by those attending the course, suggests that there are major problems with the way that Engineers deal with claims. In the majority of cases, Engineers simply do not comply with their contractual obligations. The FIDIC contracts provide the following obligations on the Engineer:

‘The Engineer shall respond to a claim within 42 days’ (Sub-Clause 20.1). This hardly ever happens.

‘In the case of rejection, the Engineer shall respond with detailed comments’ (Sub-Clause 20.1). The Engineer usually fails to provide any meaningful comments as to his reasons for rejecting claims. Additionally comments are often spurious and do not take into account the provisions of the Contract.

‘Each Payment Certificate shall include such amounts for any claim as have been reasonably substantiated as due’. (Sub-Clause 20.1). Engineers usually wait to ascertain the final details before certifying any monies.

‘The Engineer shall consult with each Party in an endeavour to reach agreement’ (Sub-Clause 3.5). Engineers usually issue their response as a ‘fait accompli’ without any form of consultation with the Contractor, or any attempt to reach agreement.

‘If agreement is not achieved, the Engineer shall make a fair determination in accordance with the Contract, taking account of all relevant circumstances’ (Sub-Clause 3.5). Determinations, if issued at all, are usually made to defend the Employer’s position and are often patently not fair and are not in accordance with the Contract.

‘The Engineer shall give notice to both Parties of each agreement or determination, with supporting particulars’ (Sub-Clause 3.5). Determinations are seldom issued and if they are, they do not contain any meaningful particulars.

If a Contractor has a just claim that is dealt with in the ways that are discussed above, the Contractor’s only way of obtaining his contractual entitlement is to elevate the matter to a dispute. As the majority of contracts in the Middle East do not include dispute board provision, this means arbitration. Consequently, the matter may take years to settle and cause the Parties to incur significant needless costs. Is the engineer doing the Employer any favours in such a situation? I think not.

Due to the above opinions, it seems that more Engineers should be taking steps to understand their obligations.

Got opinions on this? Comment below.

Learn more about our Understanding Claims Under the FIDIC Contracts Intensive Training Course here.