Trying Your Luck – Where do you draw the line with your claim submissions?

I was recently asked a question by one of our distance learning students which, at some time or another, you may have asked yourself. The question was:

Where do you draw the line when it comes to ‘trying your luck’? Is it better to be realistic in your claim submissions, taking your own delays into consideration, or do you submit all, knowing that they’re incorrect, and wait for the Engineer to ‘catch you out’?’

Obviously, a scenario where the claim is solid and difficult to refute is preferred, but there will often be ‘grey’ areas when it comes to entitlement or quantum. When preparing claim submissions for clients, we give our client the benefit of the doubt within the claim and if the Engineer notices these or disagrees with them, then this will be a basis for negotiation. It’s always good to give the other side something where they can score a few points to show that they are doing their job. To answer the question though, I think that there should be two parts to my answer.

My Answer – Part 1

Firstly, from the claims consultant’s point of view advising a contractor client, we ethically and professionally advise our clients of the strength of the potential claim. If it is not strong we will tell them why and ask them how they wish to proceed. Sometimes they will thank us for our advice and on this basis, decide not to proceed and on other occasions, they will decide to prepare a claim to throw into the negotiation ‘pot’ or to make a point.

If we have correctly advised our client and we are subsequently asked to produce a claim submission which presents the best argument possible, then provided that we have advised them of the chances of success, we have acted professionally. If your claims consultant is constantly advising you to submit claims (with their assistance), without advising you of the merits of the claim, I suggest that you look elsewhere, because they are more interested in generating fees than providing a good service.

My Answer – Part 2

This brings me on to the second point, where I will look at the situation from the contractor’s point of view. I believe that it is important for the contractor to have considered a claims strategy that is agreed at senior management level rather than by the people responsible for preparing the claims. In my experience, most contractor’s do not have this, so we try to work with them to develop such a strategy. When doing this, consideration should be given to the following:

  1. The value of the claim – does the cost/value relationship warrant the expense of claim preparation?
  2. The strength of the claim and its chances of success – is it a straight-forward matter or something that could be easily argued against and which may prevent resolution?
  3. Negotiation margin – do we evaluate the claim fairly with strong justification or build in something to be negotiated out later?
  4. The party responsible for reviewing the claim – does the respondent have expertise available, or are they likely to bring in experts to advise them?
  5. Available and suitable experience to prepare the claim – does the contractor have suitably experienced resources to prepare the claim or will it be necessary to incur costs by ‘buying in’ the required expertise?
  6. Client relationship – do we have a good relationship that we wish to maintain or have relations broken down?

After considering these matters carefully, it will usually be quite easy to decide whether to proceed with a less than strong claim submission and try your luck or to not proceed at all.