I was recently asked if there are differences between claims submitted to the Engineer and those submitted for arbitration. My response was, “Yes, there frequently is, but there shouldn’t be.” Here is a very frequent scenario related to claims that explains why that is.

  1. The Contractor considers that he has a justifiable claim for either a significant amount of money or an extension of time which will negate delay damages.
  2. He delegates the claim preparation without determining whether the person has adequate qualifications or experience to prepare a claim to a suitable standard.
  3. The person given the responsibility does his/her best, but lacking the necessary experience and skills, the claim is not prepared to a good standard.
  4. The Engineer rejects the claim because:
    • he can’t understand it
    • it does not contain adequate information
    • it is not substantiated, or
    • it just does not prove that the claim is justifiable.

    Even an impartial Engineer would be correct to do so and a defensive Engineer will be happy to have an excuse to reject the claim.

  5. The Contractor still considers that he has a justifiable claim and also thinks that the Engineer has acted unfairly. So after several months of indecision or inaction, decides to elevate the matter to a dispute and calls in the lawyers.
  6. The lawyers examine the claim and response and advise the Contractor that they agree the Contractor has entitlement but that the claim would need to be expressed properly if the matter is to succeed at adjudication or arbitration.
  7. The Contractor still does not have anyone on the team with adequate qualifications or experience to suitably prepare a claim to present in dispute proceedings. So the lawyers either offer to prepare the claim themselves or recommend that the Contractor bring in someone with appropriate skills.
  8. The properly prepared claim is presented to the adjudicators and arbitrators who make an award in favour of the Contractor. The whole process by this time will have taken years rather than weeks and involved the Contractor in considerable time and cost.

This is why there frequently is a difference between a claim submitted to the Engineer and one submitted for arbitration, but there shouldn’t be such a difference. Had the Contractor just prepared his claim to a suitable standard in the first place, rather than trying to save money on the claim preparation, the matter would have been resolved quickly and for a reasonable cost.

This blog was written by ICCP Executive Officer and Fellow, Andy Hewitt

If you would like to learn more about claims, check out our training partner, Claims Class.

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