The Different Types of Claims

A claim is simply an assertion of a party’s right under the terms of a contract or under law.

In the construction industry, this more often than not comes down to either a right to additional time to complete the works, or to additional payment and is very often a combination of the two.

The Institute of Construction Claims Practitioners has a detailed paper on this subject, covering:

  • Claims for Additional Payment for Variations
  • Claims for Extensions of Time
  • Claims for Additional Payment Due to Prolongation
  • Acceleration and Disruption Claims
  • Claims for Damages Under Law
  • Combined or Separate Claims?

To request a copy, please send an email with your contact details to hello@instituteccp.com with "Types of Claims" in the subject line.

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Proving Extension of Time Claims

Extensions of time are again hitting the headlines following the recent Technology and Construction Court decision in Carillion Construction Ltd v Emcor Engineering Services Ltd1 and others [2016], a dispute in relation to the proper interpretation of a standard form of construction sub-contract provision. Carillion contended that the nature of the particular sub-contract clause warranted a departure from the method by which extensions of time are usually applied.

However, the court rejected this argument, and found in Emcor’s favour that an extension of time was to be treated in the ‘usual’ manner. With this in mind, what are the key parameters for determining extensions of time and what is the level of proof required?

Background

Uncertainty is endemic within the construction industry and, through a combination of many factors, construction projects do not proceed as planned with the risk that the contractual completion date will not be met.

For contractors this results in a delay to the completion of the works with a corresponding liability to the employer for liquidated damages and the potential of cost overruns due to the increased costs of performance arising from prolongation.

For employers, delays result in a loss of profit, loss of revenue and potential liability to the design team and other members of the professional team engaged.

The Construction solutions team at FTI Consulting is regularly engaged to provide expert delay services in relation to formal dispute procedures but also, as a precursor, to prepare or rebut extension of time claims.

In these instances contractors will frequently seek assistance in identifying and setting out its entitlement to an extension of time or an employer may seek assistance in assessing the criticality of alleged delays and the appropriate award of an extension of time.

In doing so, the key principles relating to the preparation and award of extensions of time are often misinterpreted or over simplified.

Manoj Bahl MSc MEng CEng MICE MCIArb and Senior Director of FTI Consulting has authored a paper on "Proving Extension of Time Claims".* The paper was originally published by the Chartered ICES Construction Law Review. 

*Reproduced with permission from the Chartered ICES Construction Law Review. Copyright ©2016. All rights reserved.

To request a copy, please email your details to hello@instituteccp.com with “Proving EOT Claims” in the subject line.

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Delay Analysis Methodologies

“What are the factors affecting the selection of delay analysis methodologies in construction claims?”

Whilst the selection of the appropriate type of delay analysis to demonstrate an extension of time claim is important if the claim is to succeed, the different methodologies are often not understood by either those who prepare claims, or by those who respond to them.

The Institute of Construction Claims Practitioners has a detailed paper on this subject.

To request a copy, please send an email with your contact details to hello@instituteccp.com with “Delay Analysis” in the subject line.

Enjoying the ICCP's articles? Why not sign up to our mailing list and receive new articles straight into your mailbox. Or, want access to a library of member's only content on contracts and claims, check out our Membership page and join the ICCP community today.


Middle East Construction Disputes

Arcadis’ recent Global Construction Disputes report says that disputes in the Middle East rose to their highest value since 2011 and that the Middle East remains the only region with increasing dispute values compared to the previous year.

The length of time taken to resolve disputes in the Middle East rose to 15.2 months in the Middle East last year, although that was slightly shorter than the global average.

The report said that failure to properly administer the contract holds on to its top position regionally from last year as the main cause of construction disputes, followed by poorly drafted or incomplete and unsubstantiated claims.

Poorly drafted or incomplete and unsubstantiated claims have also been ranked as a top cause of disputes in Arcadis’ previous reports on this matter. I would also suggest that poorly drafted or incomplete and unsubstantiated responses and determinations should also rank fairly high on the list.

The message continues to be quite straightforward – if contractors wish for their claims to be resolved without dispute, then they need to invest in the time and the resources to prepare a professional claim that includes all the essential elements, information and substantiation. It really is not worth trying to cut corners on such matters.

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Notices and Conditions Precedent

The failure to submit notices in the proper form or within prescribed time frames is one of the biggest mistakes that contractors make in connection with claims.

In many forms of contract, a failure to submit notices will mean that the contractor will not be entitled to an extension of time and/or additional payment.  In some legal jurisdictions, the law will uphold the conditions precedent, yet in others, arguments may be made that they should not be applied.

The Institute of Construction Claims Practitioners has a detailed paper on this subject.

To request a copy, please send an email with your contact details to hello@instituteccp.com with “Notices” in the subject line.

Enjoying the ICCP's articles? Why not sign up to our mailing list and receive new articles straight into your mailbox. Or, want access to a library of member's only content on contracts and claims, check out our Membership page and join the ICCP community today.