Trying Your Luck: where do you draw the line with your claim submissions?

I was recently asked a question which, at one 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 submissions, taking your own delays into consideration, or do you submit all, knowing that they’re incorrect, and wait for the Engineer to discover what you have done?’

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 claims 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 are two things to consider.

First, from a claims consultant’s point of view, we must ethically and professionally advise our contractor clients of the strength of the potential claim. If it is not strong, tell them why and ask how they wish to proceed. Sometimes they will thank us for our advice and decide not to proceed. 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 which presents the best argument possible, then provided that we have advised them of the chances of success, we have acted professionally.

Second, from the contractor’s point of view, I believe that it is important for the contractor to have thought about a claims strategy that is agreed at senior management level rather than by the people responsible for preparing the claims. In my experience, most contractors do not do 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 to 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 and try your luck, or to not proceed at all.

This blog was written by ICCP Executive Officer and Fellow, Andy Hewitt. If you would like to improve your claim management skills, check out e-courses from our training partner, Claims Class.

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