The Problem with Inadequately Expressed Claims and Responses

EC Harris’ report Global Construction Disputes Report 2013 cites incomplete and/or unsubstantiated claims as one of the major reasons for construction industry disputes.

A typical scenario that I have experienced on many occasions is when a contractor submits a poorly prepared or ‘inadequately expressed’ claim to the Engineer for evaluation, and the Engineer rejects the claim on the basis that the contractor has not proved their case. The contractor, believing that they have a good basis for the claim, then refers the matter as a dispute. The question to be considered here is: is the Engineer acting properly by rejecting such a claim?

As is the case in many such questions, I would say ‘it depends.’

If we take the premise that the onus is on the claimant to prove, on the balance of probabilities, that their claim is justified, and they have not demonstrated this by discussing the cause of the claim, its effect, the entitlement to an award under the contract or at law, and have not adequately substantiated all of these matters, then the claim must fail.

The problem, however, tends to be exacerbated when the Engineer provides an equally inadequately expressed response. In such a case, the Engineer is encouraging a dispute. In my opinion, the Engineer has a duty to resolve matters proactively and fairly, and although this does not extend to making an unjustified award, in such a situation, the response should be made in a manner that ensures the contractor is fully aware of the reasons their claim has been rejected. This, more often than not, requires a fully detailed response. The contractor then has the option to either provide further particulars to support their claim or to resubmit the claim in a way that includes the essential elements to prove their case.

If both parties handle claims properly and professionally, the likelihood of them being elevated to disputes will be considerably reduced.