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How To Prepare A Claim

- Project Manager - Site Supervisor - Contracts Manager - Site Foreman - Site Engineers - Subcontractors All project personnel should maintain contemporaneous records. The Contractor has overall responsibility but records should be kept by all parties.

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Manikandan
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603 views

How To Prepare A Claim

- Project Manager - Site Supervisor - Contracts Manager - Site Foreman - Site Engineers - Subcontractors All project personnel should maintain contemporaneous records. The Contractor has overall responsibility but records should be kept by all parties.

Uploaded by

Manikandan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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HOW TO PREPARE A CLAIM

A PRESENTATION TO AIQS
MUSCAT
DATE: 28 OCTOBER 2016
AGENDA

AGENDA

When is it a claim?
Extensions of Time
Additional Payment
Presentation of a claim
Essential elements
Reasons for failure
Records
What next?
Summary
WHEN IS IT A CLAIM?

Variations

Extensions of Time

Letters of Intent

Termination

Errors, omissions and contradictions

Fluctuations in prices

Changes in legislation

Incomplete / defective work


EXTENSION OF TIME

Principal purpose relief from penalties / LADs


Contract will provide mechanism
Events identified in conditions of contract
Notice requirements content
Notice requirements time
Time bar or condition precedent

If no contractual provision for EOT time at large


OSFC 4 Edition 1999
Clause 44
Extra or additional work, Exceptional adverse climatic conditions, special
circumstances of any kind whatsoever, delay in drawing issue etc.
Submission of full and detailed particulars within 28 days
No time bar
EOT DEMONSTRATING ENTITLEMENT

Contractual basis
Identify the events
Have compliant notices been given?

Evaluating delay
Cause and effect
Critical Path

Baseline programme
Contract requirement?
Format, information required?
Penalties for non-submission?
EOT Evaluating delay

The baseline programme

Identifies logical sequence of tasks and sets a timescale against


those tasks for the completion of a project

Provides a means of monitoring / measuring progress

A useful management tool for the Contractor

Baseline for the establishment of delays / disruption

Vital framework for multi-contract, complex projects


EOT EVALUATING DELAY

Analysis of Delay
Amendments to baseline programme acceptable to a limited extent
Forensic delay analysis
As-planned vs As-built

Impacted As-planned

Collapsed As-built

Time Impact Analysis (TIA)

Which method?
What does the contract specify? (if anything)

Which approach is appropriate / correct / sustainable / proportional to dispute

Is a method eliminated through lack of information?

Is a method eliminated through time / cost contraints?

Condition of the baseline programme


EOT SUMMARY

Burden of proof rests with Contractor

EOT is essentially a defensive claim

Invest in the baseline programme

Regularly update the programme

Maintain as-built information

Establish cause and effect

Recognise culpable delay and concurrency


ADDITIONAL PAYMENT

Satisfy notice / submission requirements


OSFC Cl. 52.5
Monthly account

FIDIC Red Book


Within 28 days - Initial notice
Maintain contemporaneous records
Condition precedent to entitlement
Within 42 days fully detailed claim

IChemE
Within 14 days initial notice
Maintain contemporaneous records
Condition precedent to entitlement
As soon as possible written statement
ADDITIONAL PAYMENT - HEADS

Site overheads (preliminaries)


Off-site / Unabsorbed overhead
Failure to recover the level of overhead that could be reasonably
expected
Resources have been retained on site for longer than anticipated
Actual costs
Percentage addition
Formula calculation
Has Contractor turned down work opportunities?
Profit
Finance charges / interest
Disruption
Claim preparation costs
PRESENTATION OF A CLAIM

Comprehensive document will assist in negotiations

Third party reviewer

Clearly-defined sections

Simple language

Logical

What are you asking for?

Supporting evidence - referenced


ESSENTIAL ELEMENTS

Contents page
Executive Summary
Introduction
The Project
The Parties
The Contract
The basis of the claim
Narrative
The story of events what went wrong
Factual
Reference to correspondence, emails, MOM etc
ESSENTIAL ELEMENTS

Contractual basis of claim


Establish entitlement
Notice provisions and condition precedent
EOT
Additional payment
Extension of Time
Delay analysis
Cause and effect
Additional payment
ESSENTIAL ELEMENTS

Avoid global claims


Multiple events causing overall delay or loss
Simple to plead difficult to prove
No cause and effect
But not necessarily dismissed
Summary / conclusion
What are you asking for?
Additional time
Additional payment
Relief from penalties / LADs
Supporting documentation
REASONS FOR FAILURE

Failure to demonstrate contractual entitlement

Failure to describe the factual matrix

Failure to establish cause and effect

Failure to provide evidence of costs incurred / losses

Presentation

Lack of contemporaneous records


RECORDS

Five Key Questions:

Why do we need records?

What records should we keep?

Who should keep the records?

Where do we keep them?

When do we create the records?


RECORDS

A party to a dispute, particularly if there is arbitration, will learn thee lessons


(often too late): the importance of records, the importance of records
and the importance of records.

It is impossible to exaggerate the extent which lawyers can find unexpected


grounds, often quite real, on which to cast doubt on evidence if it is not
backed by meticulously established records. It must also be remembered that
the arbitrator will know nothing about the history of the works, which must be
reconstructed for him with all the complexities and nuances, from the records
available.

Max W Abrahamson, Engineering Law and the ICE Contracts, 4th Ed., Applied Science Publishers Ltd, London
(1979)
RECORDS WHY?

In a dispute he who asserts, must prove.

Important to prove your case to either to the person you are dealing with
or a decision maker.

Records are not just important in disputes or if there is an arbitration or


other dispute resolution process.

To ensure entitlements to compensable events can be evaluated on a fair


and reasonable basis

To ensure entitlement to time can be properly assessed

To reduce the potential for disputes facts can be agreed as facts

To advance and/or defend claims i.e. loss and expense


RECORDS WHAT?

How much detail is needed?


Who

What

Where

When

Why

How
RECORDS WHAT?

What does the Contract prescribe (if anything)?

Oman Standard Documents for Building & Civil Engineering Works


Cl. 35 Reports on labour & plant
Cl. 44 Full and detailed particulars
Cl. 52.5 Particulars for claims

FIDIC
Cl. 6.10 Records of personnel & equipment
Cl. 20.1 Claims contemporary records as may be necessary

IChemE
Cl. 3.7 Monthly reports with supporting documentation
Cl 18.1 records which relate to the claim
RECORDS WHAT?

Contract/planned programme Daily allocation sheets


As built programme Site diaries
Progress photographs with dates when taken Diaries and notebooks kept by individual
Video footage / time-lapse cameras project personnel
A copy of the agreed contract & contract Records of key telephone conversations
documents
Subcontractor information (including
A full set of correspondence correspondence and accounts)
Variation orders and site instructions Labour and Plant returns
Minutes of meetings
Procurement schedules
Drawings (including all amendments)
Schedule of Material deliveries
Drawing registers
Labour, Plant & Material cost information
Requests For Information (RFIs) and responses (including copy invoices)
Daywork sheets All other accounts information
Notices
Details of head office staff involvement
RECORDS WHO?

The contract specifies roles for the Contractor / Project Manager /


Supervisor and details much of what is to be produced.
Onus upon the Contractor
Employer must accept tenders / preliminaries will reflect this
However avoid duplication with open approach and agreement
over access
Allocating the task to individuals
Those best placed to record
Always derived from site
If the Employer and Contractor keep the same records then
disputes as to facts should be rare.
Why not agree what records will be kept at the outset and share
them?
RECORDS WHERE?

Are they mutual records?


Cost records
Contract programmes
Electronic copies of documents
Web portals / EDMS systems
Back up documents
Consider disclosure issues - confidentiality
Head office copies
Site records electronic / paper
Traditional site records
Staff leaving / arriving
Laptops and USB drives
Closing the site office
RECORDS - WHEN?

Silly question?

Contemporary

Can be done retrospectively - witness statements, wage records,


forensic delay analysis.

Higher cost and risk involved

Often impossible after the project complete


CONTEMPORARY RECORDS

On the true construction of Clause 53 FIDIC

(1)`Contemporary records in Clause 53 of the FIDIC Conditions, 4th


Edition, means original or primary documents, or copies thereof,
produced or prepared at or about the time giving rise to the claim,
whether by or for the Contractor or Employer.

(2) Contemporary records does not mean witness statements produced


after the time giving rise to the claim where such statements cannot
be considered to be original or primary documents prepared at or
about the time giving rise to the claim.

(3) Where there is no contemporary record to support a claim, that claim


fails.

Attorney General for the Falkland Islands v Gordon Forbes Construction (Falklands) Ltd (No2). [2003] FISCt
BLR 280
WHAT NEXT?

Negotiation
Arbitration
ADR
Mediation

Conciliation

Adjudication

Dispute Adjudication Board (DAB)

Expert (Third Party) Determination


Litigation
SUMMARY

Burden of Proof rests with the party making the claim

Comply with the notice provisions of the Contract

Records, records, records

Develop measured mile

Avoid global claims

Comprehensive document

Fully substantiated
QUESTIONS
OMAN OFFICE DETAILS

Andrew Smith PO Box 363


Operational Director Al Ghubra, P.C. 121, Seeb
[email protected] Muscat, Oman

[email protected]
www.drivertrett.com Telephone
+968 2 461 3361
THANK YOU
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