Inadequately Expressed Claims: the second most frequent reason for disputes

ARCADIS have recently published their Global Construction Dispute Report 2018 and unsurprisingly “Poorly drafted or incomplete/unsubstantiated claims” is reported as the second most frequent reason for disputes. This annual report has consistently ranked the same reason highly for several years, so it seems that the industry is not learning the fact that the onus is on the claimant to properly prove his case and that failure to do so will be costly and time-consuming.

Simply put, a claim is an assertion of a party’s right under the terms of a contract or at law. Following on from this, the object of a claim should therefore be to demonstrate that the claimant has entitlement to compensation and to demonstrate the amount of compensation. What the report is telling us is that claimants in dispute actually had a just claim, but did a bad job of asking for it.

When ARCADIS also report that the average dispute value is US$43.5 million and the average length of disputes is 14.8 months, isn’t it about time that contractors started to do a much better job of asking for something that they are entitled?

Preparing a claim, of either small or large value, is not rocket science, but it does require time, effort and skill to ensure that it is properly compiled and presented. It also requires the claimant to include some essential elements to adequately demonstrate entitlement. Yes, preparing a claim to the standard necessary to resolve the matter without dispute costs the claimant money, either in employee time or external assistance, but with an average dispute of US$43.5 million, this has to be money well spent.