A student recently asked, “Is there any difference between a claim submitted to the Engineer and one submitted for arbitration?” My response was along the lines of, “Yes, there frequently is, but there shouldn’t be.”

The Scenario:

Let me explain why by describing a very frequent scenario related to claims.

The Contractor considers that they have a justifiable claim for a significant amount of money or an extension of time. This claim, in turn, will negate delay damages.
Our Contractor reviews the resources available to them and allocates responsibility for preparing the claim. However, they do not ascertain whether the person preparing the claim has adequate qualifications or experience to prepare it to a suitable standard.
The person given the responsibility does their best. However, lacking the necessary experience and skills, the preparation of the claim is not to a good standard.
The Engineer rejects the claim because it cannot be understood. It does not contain adequate information, it lacks substantiation, or it does not prove that the claim is justifiable. Even an impartial Engineer would be acting correctly in doing so. A defensive Engineer would be glad to have an excuse to reject the claim.
The Contractor still believes that a justifiable claim exists and thinks that the Engineer has acted unfairly. After several months of indecision, the Contractor elevates the matter to a dispute and calls in the lawyers.
The lawyers examine the claim and the response, and advise the Contractor that they agree the Contractor has entitlement, but the claim needs to be expressed properly if the matter is to succeed at adjudication or arbitration.
The Contractor still does not have anyone on the team with the qualifications or experience to prepare an adequate claim. So, the lawyers offer to prepare it themselves, or they recommend that the Contractor bring in someone with the appropriate skills.
The properly prepared claim is then presented to the adjudicators and arbitrators. They, in turn, make an award in favor of the Contractor. By this time, the whole process will have taken years rather than weeks and involved considerable time and cost for the Contractor.

The Reality:

Maybe now you can understand why, frequently, there is a difference between a claim submitted to the Engineer and one submitted for arbitration. More importantly, you may see why there shouldn’t be such a difference. Had the Contractor just prepared their claim to a suitable standard in the first place, rather than trying to save money on claim preparation, the matter could have been resolved quickly and for a reasonable cost.

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