Previously published over on our sister company’s website, this article builds on the talk given by Bill Bordill at our seminar in 2018 and looks at the key ingredients for a successful construction claim:
What is a claim?
Often folk think of ‘claim’ as a dirty word, something they ought not to get involved with. This is of course, in part, a result of the adverts you sometimes see on TV, ‘had an accident? Not your fault…’. But it is important to remember that in construction, a claim is only an assertion of a contractual right. It’s something you’re entitled to. It shouldn’t be seen as a dirty word.
For the purposes of this article, we’ll split claims into informal and formal. An informal claim would be something such as a variation. Usually there’s a straightforward mechanism to automatically adjust the contract sum in the case of a variation, and there’s no need for a formal resolution process.
A formal claim would be something that falls outside the standard mechanisms of the contract, or which cannot easily be resolved. Examples might include an unexpected change or circumstance that leads to loss and expense or prolongation.
What are the Procedures?
Firstly, and most importantly, you have to issue a proper notice. Often known as a ‘condition precedent to entitlement’, it’s important to ensure a notice of claim is issued correctly. Make sure it complies with the contract. Ensure it’s issued in the right form, and the content is kept as broad as possible. It must be delivered to the right address, in paper or by fax if required. Most importantly, it must comply with any specific requirements set out and agreed to in the contract. Get this stage wrong, and the rest of the process might be pointless.
The Four Corners:
There are four key elements which must be demonstrated in order to prove entitlement to a claim. These are:
- Cause
- Effect
- Entitlement
- Substantiation
The Cause: What was the Event? The change or the circumstance that led to the loss? The cause can range from exceptional weather conditions to a delay or event caused by the Employer. In any case, there needs to be a link from the cause to the event. These might be problems such as exceptional weather conditions, delays caused by the employer, or changes in legislation.
The Effect: This needs to be a direct result of the event and a loss needs to be incurred. Often the most challenging area for most people who’ve been involved with a project is explaining why the cause created the effect and proving a direct link between the two.
Entitlement: There needs to be an entitlement to the claim in the contract or a similar statutory legal entitlement you’re able to claim.
Substantiation: Max Abrahamason, an eminent lawyer in Dublin once wrote, ‘records records and more records’ are key to a successful claim. Ideally, the records need to be those made and shared at the time the event occurred (contemporaneous) in order to ensure they can be successfully used in a claim. Strong evidence is crucial to a successful claim.
Presenting the Claim:
First and foremost – keep it simple. Write a claim as though it’s being addressed to a fourteen-year old. This should be someone intelligent but completely unfamiliar with your story.
Don’t start with what you want and justify it. Start with what the plan was and explain the story of the things that led to the claim. Explain the cause and the resulting effect you wish your reader to understand. Whatever you do, don’t pretend to be a lawyer. There’s no need to fill sentences with long and complicated language. It should be short, punchy and to the point.
Structuring the Claim:
- Start with an executive summary. Compress the dispute into two pages
- Include a statement of claim – expands upon the summary – describes the amounts claimed, etc.
- Define any specific relevant contract terms and particulars
- The cause and effect narrative then begins. You need to craft the story that explains the events that led to the effect creating entitlement in a dispute.
- Appendices – put your supporting evidence in the appendices. Keep them well away from the claim document. Your records and your analyses go in the appendices. The claim documentation should be brief, the detail and supporting evidence sits in the appendices.
The above guidance should help you to put together a successful claim, but seek help if it’s something you’re not experienced with. Like most things, success comes with experience and understanding of the process.