Q&A: Delays, Extension of Time, and Force Majeure

The following questions, related to contractual issues arising from COVID-19, were posed at the end of our first Construction Clinic held in April 2020. The entire webinar may be viewed on-demand on YouTube. In the webinar, these questions are preceded by a brief presentation on the general Notice requirements that exist regardless of the form of contract. Question 1 Question: Does the Contractor have any duty or obligation to mitigate delays and costs and, if so, to what extent? (related to FIDIC Red Book 1999). Answer: FIDIC doesn’t give any explicit obligations to the Contractor to mitigate. However, in most jurisdictions, it’s an implicit requirement that both parties work together proactively for the benefit of each other. So there is an implicit obligation to do what you can to mitigate the circumstances. The SCL protocol goes further than this and actually says that mitigation should take place but not to the extent that the Contractor should incur additional costs or mobilise…

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How to Manage and Minimise the Submission of Spurious Claims

One of our blog readers asked for some suggestions as to how to effectively manage and minimise the submission of spurious contractor’s claims, which I thought would make an interesting subject for other readers, as well. Consultants need to spend a lot of time and effort to manage and respond to contractor’s claims, so to avoid wasted effort, it is worth making sure that this time and effort is devoted to justifiable claims and is not wasted on reviewing and responding to claims for which the contractor has no entitlement, or to those that have not been submitted in an appropriate manner to enable a proper review and response to be made. It must be remembered that the onus is on the claimant to prove the case and even though most contracts require the consultant to be fair and reasonable when responding to claims, this obligation does not extend to proving the contractor’s claim on the contractor’s behalf. Most forms of construction contract support this obligation and require the…

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How to Ensure You Avoid Costly and Time-Consuming Disputes on your Projects

In this post, I'll look at ARCADIS' annual Global Construction Disputes Report 2019, as it makes interesting, but, not altogether surprising reading. For the time period covered in the report, the top three reasons for disputes are: 1. ‘Owner/Contractor/Subcontractor failing to understand and/or comply with its contractual obligations; 2. Errors and/or omissions in the contract document; 3. Failure to properly administer the contract.’ Some other interesting noteworthy observations are: 1. ‘Human factors and misunderstanding of contractual obligations continue to be a primary cause of disputes’; 2. ‘With more project participants, it is essential for those involved to understand the contract, their role in the project and how to work with the team’; 3. ARCADIS suggest that ‘at least three building blocks are needed for successful dispute avoidance and resolution: (1) contractual mechanisms whereby risks are identified early and parties are obliged to consider how to address them; (2)…

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The Engineer’s Responses and Determinations: What Should be Included?

Following a CPD talk to RICS members in Dubai on the topic of Engineer’s Responses and Disputes, attendees were polled by show of hands on the following questions: How many attendees have experienced a situation where the Engineer does not respond to a claim within the contractual time-frame? Almost everyone confirmed that they had. How many attendees have experienced a situation where the Engineer’s response has done little to resolve the claim? Again, almost everyone confirmed that they had. How many attendees have experienced a situation where the Engineer’s response has caused the matter to be escalated to a dispute? Over 50% of attendees confirmed that they had experienced this situation. How many attendees think that failures of the Engineer to carry out their contractual obligations with respect to claims is helpful to projects? No one thought that this helped projects. This is clear feedback from RICS members that the Engineers often do not perform their obligations and that…

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Types of Claims Q&A

In 2019, the ICCP's training partner, Claims Class, presented a series of monthly webinars on claims for the CIOB, based on the Construction Claims e-courses.* There were a good number of attendees. At the end of each webinar, participants were invited to ask questions. If time ran short during the webinar, attendees each received a collection of written responses to any questions which could not be covered in the allotted time. Hopefully, this will provide some useful insight to readers of our blogs. The following are questions and answers from the webinar on Types of Claim. This is a follow-up to the previous post, Contract Administration for Claims. Question 1 Question: Under the FIDIC suite of contracts (1999 edition) could you please advise what options the contractor has in case of force majeure conditions (i.e. Arab Spring in North Africa) if they continue to incur charges for the project. For instance, should the contractor continue to pay for renewing his Advance Payment…

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