interim claims

Interim Claims

How To Deal With Them

One of our Claims Class students asked for some advice on interim claims. It is a topic that often crops up, so I thought that readers of this blog might also benefit from some practical advice.

The principles discussed here are appropriate to many forms of construction contracts. However, for the purpose of this article I shall use the 1999 FIDIC contracts as an example.

Sub-Clause 20.1 (Contractor’s Claims) obliges the Contractor to submit a fully detailed claim with supporting particulars. You must be submit this within 42 days or the event or circumstance giving rise to the claim. However, sometimes you may not be able to ascertain the final effects of a claim event within the 42-day period.

Sub-Clause 20.1 (Contractor’s Claims) deals with such eventualities as follows:

… If the event or circumstance giving rise to the claim has a continuing effect:
(a) this fully detailed claim shall be considered as interim,
(b) the Contractor shall send further interim claims at monthly intervals, giving the accumulated delay and/or amount claimed, and such further particulars as the Engineer may reasonably require, and
(c) the Contractor shall send a final claim within 28 days after the end of the effects resulting from the event or circumstance, or within such other period as may be proposed by the Contractor and approved by the Engineer.

Consequently, if you cannot ascertain the final effects of a claim, the Contractor must submit an interim claim within 42 days. Following this, you should continue to submit monthly interim claims until the final effects are determined.

Each interim claim should be based on the best information available at the time. Each update should be based on additional or more accurate information as it becomes available. The Contractor should submit a final claim within 28 days after the effects have ended.

This procedure ensures that the Engineer and Employer are kept updated. They will have access as to the latest estimates of time and costs to enable them to take appropriate action.

What should a claim include?

In practical terms we have three options when considering what information, the interim and final claims should contain:

  1. The first interim claim will contain the project details, the details of the cause of the claim, a demonstration of contractual entitlement, the latest available information and an interim calculation of the effect in terms of time and/or payment. Subsequent interim claims and the final claim will present information that has subsequently become available. It should include revised calculations of time and payment.
  2. As the above, but the final claim will consolidate everything into a stand-alone document. This one document will contain the complete particulars of the claim.
  3. Each claim submission will contain everything related to the matter that is available at the time of submission. Each will tell the whole story to date.

There are some key points for effective claims that we repeat time and time again on this blog. Firstly, the reviewer’s job should be made as easy and pleasant as possible. Secondly, that a claim should comprise a stand-alone document to enable the respondent to make a fully reasoned response. Therefore, when considering the advice above, it is clear the third option is the best one.

In practical terms, the man-hours to achieve the best and most professional submissions will be about the same as the “easy” options. So, when preparing interim claim on behalf of our contractor clients, our consultancy practice always prepares each submission as a stand-alone document. Our advice to you, would be to do the same.