Evaluating contract claims

Most medium to large construction contracts include a claim forextra payment for variations or disruption to the programme. Whilstthe causes of the claim are often well documented, what can andcannot be included in the payment is often misunderstood and thecalculation of quantum consequently becomes vague and poorlysubstantiated.

Thoroughly updated over the previous edition, reflectingpertinent Court decisions on damages and the duty to mitigate, thenew edition covers new provisions of the revised JCT 2005 contractsand the 2005 New Engineering Contract. There is substantialadditional material on issues arising from time and delay analysisand the financial consequences of changes to time ? issuesthat regularly cause real problems in the evaluation of quantum forconstruction claims.

Most current books on the subject concentrate on theestablishment of liability and the requirements of individualstandard forms of contract. This book, however, concentrates on thequantification of claims after liability has been established,regardless of the form of contract used, and sets out theprinciples and methods that should be reflected in the evaluationof claim quantum and the standard of substantiation required. Itwill therefore appeal to those working with both building andengineering contracts.

Reviews of the previous edition

"Well written and highly informative" BuildingEngineer

?His observations on the assessment of productivity andthe use of facilities and equipment are particularly helpful forlawyers, who deal with construction claims? ConstructionLaw

Author Notes

Peter Davison BA MSc FRICS FCIArb has spent much of hiscareer as a quantity surveyor working on projects in many parts ofthe UK, Europe, and the Middle and Far East. He worked for civiland mechanical engineering contractors, client organisations andconsultants before founding Davison George and Partners in 1982,now Driver Consult Ltd. A Fellow of the Royal Institution ofChartered Surveyors and the Chartered Institute of Arbitrators, hehas also sat as an Arbitrator on major international disputesadministered by the International Chamber of Commerce.

John Mullen BSc(Hons) MSc FRICS FInstCES FCIArb MAE beganhis training with a national firm of contractors, subsequentlymoving into private practice and has specialised for the last 25years in providing consultancy services to the building andengineering construction industries. He has enjoyed over 40appointments as an expert witness in cases at the High Court,International Chamber of Commerce arbitration, and in domesticarbitration.

Dedication	p. v
Acknowledgements	p. vi
Preface	p. vii
1 Introduction	p. 1
1.1 Risk analysis and management	p. 12
1.2 Risks and records	p. 15
1.3 Reimbursable risks	p. 18
1.4 Non-reimbursable risks	p. 19
1.5 Sources of change and disruption	p. 19
1.6 Summary	p. 24
2 Establishing the base	p. 25
2.1 Planned change	p. 26
2.2 Unplanned change	p. 37
2.3 Summary	p. 42
3 Effect of change on programmes of work	p. 44
3.1 Use of programmes	p. 45
3.2 Use of as built programmes	p. 48
3.3 Change without prolongation	p. 51
3.4 Prolongation of the works	p. 55
3.5 Analysis of time and delay	p. 57
3.6 Summary	p. 101
4 Sources of financial information for evaluation	p. 103
4.1 The contract provisions	p. 104
4.2 Tender documents and information	p. 108
4.3 Tender calculations and assumptions	p. 111
4.4 Invoices and cost records	p. 112
4.5 Accounting information	p. 116
4.6 Summary	p. 119
5 Evaluation of the direct consequences of change	p. 120
5.1 Unit rates and prices	p. 122
5.2 Unit costs	p. 151
5.3 Subcontractor and supplier costs	p. 168
5.4 Summary	p. 173
6 Evaluation of the time consequences of change	p. 174
6.1 The causal link	p. 175
6.2 Prolongation	p. 179
6.3 Disruption	p. 190
6.4 Acceleration	p. 219
6.5 Global claims	p. 225
6.6 Overheads and profit	p. 234
6.7 Formula approaches	p. 250
6.8 Summary	p. 258
7 Other sources of claims	p. 259
7.1 Letters of intent	p. 259
7.2 Termination of employment	p. 262
7.3 Errors, omissions and contradictions	p. 267
7.4 Fluctuations in prices	p. 271
7.5 Incomplete and defective work, etc.	p. 274
7.6 Summary	p. 278
8 Minimising the consequences of change	p. 279
8.1 Contract preparation	p. 282
8.2 Alliance and partnering contracts	p. 284
8.3 Early warning systems	p. 287
8.4 The claims industry	p. 289
8.5 Summary	p. 292
Appendices	p. 293
A Example of financial accounts	p. 293
B Example of management accounts	p. 295
Table of Cases	p. 297
Index	p. 301

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