November 20, 2020
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…
July 10, 2020
How to Ensure Engineers’ Responses and Instructions Do Not Result in Expensive Claims
A request was made by one of our blog followers to examine the Engineer’s duty to provide instructions and responses within a reasonable time. In my experience, failure of the Engineer to comply with such obligations often gives rise to claims, so this is definitely worth a blog post. This example uses the 1999 FIDIC Red Book, although other forms of contract contain similar provisions. Sub-Clause 1.3 (Communications) states that ‘Approvals, certificates, consents, and determinations shall not be unreasonably withheld or delayed’ which immediately begs the question: what constitutes unreasonable delay? The contract itself provides guidance in many circumstances. For example, Sub-Clause 14.6 (Issue of Interim Payment Certificates) provides that payment certificates shall be issued within 28 days of the Contractor’s Statement being received and 10.1 (Taking Over of the Works and Sections) obliges the Engineer to either issue the Taking Over Certificate or reject the Contractor’s…
April 20, 2020
Contractors: Are your claims responded to correctly?
EC Harris’ (now Arcadis) Global Construction Disputes Report has, for many years, cited inadequately expressed claims as being one of the top five causes of disputes in the construction industry. Although the reports do not specifically mention it, I suspect that inadequate and unfair determinations should also be somewhere near the top of this list. This is because I frequently hear complaints that a claim has not been responded to either fairly or in a meaningful way. So, what is the problem? If we consider the FIDIC forms of contract as fairly typical of the widely-used forms of contract, we can see that the Engineer has the following obligations when responding to claims: Respond to the claim within 42 days - Sub-Clause 20.1 (Contractor’s Claims); In a case of rejection, respond with detailed comments - Sub-Clause 20.1 (Contractor’s Claims); Include sums that the Engineer considers to have been reasonably substantiated as being due in interim payment certificates - Sub-Clause…
April 23, 2019
Do Project Consultants Understand their Obligations with Regard to Claims?
I recently presented a training course on claims and FIDIC and quite surprisingly, almost all attendees were from contractors or subcontractors. Does this mean that those appointed to act as ‘the Engineer’ under FIDIC or other consultants appointed to administer contracts consider that they already understand this subject fully, or are Engineers just not interested in dealing with claims properly? My own personal experience, which was supported by those attending the course, suggests that there are major problems with the way that Engineers deal with claims and in the majority of cases Engineers simply do not comply with their contractual obligations. The FIDIC contracts provide the following obligations on the Engineer: The Engineer shall respond to a claim within 42 days (Sub-Clause 20.1). This hardly ever happens. In the case of rejection, the Engineer shall respond with detailed comments (Sub-Clause 20.1). The Engineer often fails to provide any meaningful comments as to his…
December 18, 2018
Determinations, Rocks and Hard Places
Most form of contract oblige the consultant responsible for determining the contractor’s claims (the Architect, Engineer or Contract Administrator), to make a fair and reasonable award or decision in accordance with the contract. I question that I often get asked by those acting in such positions is “What should we do when the client puts us under pressure to issue an unfair or unreasonable determinations?” When determining claims, the consultant is between a rock and a hard place. If too little is awarded, the situation is likely to be elevated to a dispute by the Contractor, which could cost both parties considerable time and money and if too much is awarded, then the client will not be happy. If we bear in mind that the client pays the consultant’s fees, it is very probable that the consultant will feel under pressure to favour the client in such situations. My answer to such questions is always the same. It should firstly go without saying that the determination should actually be…