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21st Gulf Engineering Forum Construction projects: navigating the claims minefield
Presentation ———— February 2018
Top tips
Top tips
● Claims on Construction Projects
● Tips for the Project Team and importance of
contemporaneous records
● How to defend a claim
● Focus on Variations
● Focus on Delay
Claims on Construction Projects
Contractor Claims on Construction Projects
● Claims for varied and additional works
● Extensions of time and associated prolongation and
disruption claims
● Claims for unforeseen physical conditions
● Measurement disputes
Employer Claims on Construction Projects
● Liquidated damages claims for delay
● Claims arising from defective works
● Claims for additional costs of an alterative contractor to
complete where original contractor terminated
How to evidence a claim on a construction
project
● Written records and documentary evidence
• Tender
• Contract documents
• Programme
• Drawings
• Instructions
• Requests for Information
How to evidence a claim on a construction
project
● Written records and documentary evidence contd:
• Correspondence
• Minutes of meeting
• Notices
• Site records, progress reports, photographs
• Financial and cost records
● Use a document management system
How to evidence a claim on a construction
project
● Witness evidence
• Key personnel with first hand knowledge
● Expert evidence
• Early technical input
How do you defend a claim?
How do you defend a claim?
● On receiving a claim priority is likely to be to defeat it
entirely
● Generally difficult, but circumstances can include:
• Claim brought in wrong forum
• Time bar of limitation
• Fundamental difficulty with claim
• Failure to comply with notice requirements
How do you defend a claim?
● Majority of claims are likely to involve a genuine dispute
● Claims are brought where there is entitlement to somepayment in addition
● Amount claimed by contractors tends to be inflated
● What should you do?
• Ascertain likely outcome of case
- Short summary of key differences
- Where’s the money?
• Consider settlement
- BUT be careful and consult with legal team
Focus on Variations
Focus on Variations
● What is a variation?
● FIDIC 4th Clause 51.1 gives power to the Engineer to “make any variation of the form, quality or quantity of the Works” by requiring the Contractor to:
• Increase or decrease the quantity of any work included in the Contract
• Omit any such work
• Change the character or quality or kind of any such work
• Change the levels, lines, position, dimension of any part of the works
• Execute additional work of any kind necessary for completion of the Works or
• Change any specified sequence or timing of construction of any part of the Works
Focus on Variations
● Why have Variations?
• Preserves the contract while allowing changes
• Gives the Employer the flexibility
• Gives the Employer a mechanism for extra work
• Ensures Contractor is paid for providing extra or
different work or materials
• Allows Employer to have more work carried out at
the same or similar prices
• Ensures that the contract is not frustrated
Focus on Variations
● Common issues:
• Already included in the contract?
• Does the contract allow Variations?
• Can work be deleted or omitted?
• Is the contractor entitled to be paid for a variation?
• Notice provisions?
• Any condition precedent to payment imposed by
the contract?
• Valuation of a Variation?
Focus on Delay
Typical Contractor delay events
● Variations
● Instructions
● Access
● Delays to
• Instructions
• Approvals
● Disruption to planned methodology
● Problems with Employer free issue items / materials
If you receive correspondence or claims listing any of
these items BEWARE
Typical Employer responses to claims of delay
● Under-resourced
● Inadequate time allowed
● Delays to Design / Approvals
● Late procurement
● Defects requiring remediation
● Poor contract management
● Issues with Subcontractors / Suppliers
Tools to assist identifying delay
● Factual witnesses
● Programmes
● Regular progress reports / meetings
● Instructions
● RFIs and Responses
● Notices of any defects
● Resourcing – planned vs actual
● Progress indicators / schedules
● Commissioning / handover schedules
Analysis of delay
● Forensic examination of project documents
● Delay analysis
• Contract requirements?
• Methodology – what fits with issues / project?
• What supporting records are available?
• Time available
Conclusion
Conclusion
● Ensure all key personnel aware of relevant contract
provisions
● Use your contact as a tool
● Document management system – put it in place and
use it
● Be constantly vigilant for potential claims and give
earliest possible notice
● Avoid advancing unmeritorious claims or position
Questions?
Contact
© Trowers & Hamlins LLP 2017
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Cheryl Cairns
International Construction Partner
d +971 (0)4 351 9201
