The following article is based on a recent webinar. Decipher CEO, Paul Gibbons joined the Construction Industry Federation in Ireland and Graham O’Doherty of Maples Group to share practical tips for preparing the perfect construction claim.

What is a construction claim?

Firstly we need to dispel the myth that claims under a construction contract are akin to ambulance chasing.

Making a claim is simply the assertion of your rights under the contract. If the works expand beyond the additional scope, or delays occur, you are entitled to claim for the additional time, payment or loss and expense.

How you make that claim is the important part.

How you develop and present the claim will affect the response you receive from the engineer or architect.

The purpose of the initial claim is to put forward your best position. Depending on the strength of the claim, you may find it is accepted, or that you have opened a route to negotiate. Should negotiations fail, the claim will form the basis of your position in formal dispute resolution proceedings. If it is not prepared effectively, you may find yourself needing to redo it from scratch.

The Four Corners of a Claim

This is the secret to all well prepared claims. Each claim should sit upon four pillars, without one element of the pillars, your claim will almost certainly fail.

We use the acronym CEES: Cause, Effect, Entitlement and Substantiation. If you remember these four corners, your claim will put you in a better position.

Let’s take a look at each corner in a bit more detail:

Cause

Three questions here to ask yourself:

  • What happened?
  • Whose fault is it?
  • What does it mean?

There are all sorts of events which could lead to a claim. You could be prevented from accessing the site or be given restricted or late access. You might not be given instructions on time. The scope of works may change during the works. Legislative changes, like those we saw as a result of COVID-19 could impact the way you are able to work on site.

Whatever the cause, you need to identify it, and track down the records that show it taking place and the immediate impact.

Effect

To establish the effect of any event, your starting point will always be the programme and budget. Establish where you were, and what this means for the project going forward. The effect is typically going to be in the form of money, time or both.

Entitlement

This is where it is important that you know your contract. In here, you will find out whether you have a claim, what the remedy may be and how you need to claim.

Don’t forget that construction contracts are often heavily amended. Don’t assume because your previous project used the same form of contract, that the claims process will be the same this time around.

Take a careful look at what the contract says about notices. What is the time period for submission? What do you need to submit? In what format should the notice be submitted? One of the most common reasons we see claims fail is because they have fallen foul of the notice provisions in the contract.

Substantiation

This is the point at which we need to submit the evidence supporting our claim. Once again, you need to look back to the contract to see what is required.

If you need to refer to legal precedence or case law, then this is perhaps time when you might want to speak to a specialist construction lawyer who can advise you.

But overall, what you are looking to do here is back up the facts with evidence. This is why we spend so much time talking about good record keeping. Evidence can come in the form of project records, emails, letters, site diaries, RFI logs, drone surveys and all manner of other forms.

If you don’t have the proper records, recorded at the time when the events take place, your claim will struggle and most likely fail.

Preparing the Claim

As you begin to pull the claim together, remember that you should be aiming to make the reviewer’s job as easy and pleasant as possible. Make sure the claim narrative is coherent and the documents are easy to find.

Assume the person reviewing the claim has no prior knowledge of it.

Set the scene and make it clear what the relationship is between parties. Tell a story. Help the reviewer understand what has happened and why you are in the position you find yourself in. The easier you make it for the reviewer to understand what is going on, the more successful you are likely to be.

Ensure the claim is a stand-alone document. Identify the individual items that make up the dispute. This will allow you to close the gap between your view and that of the other party and begin to narrow the issues. Open ended claims leave discussions open ended. By individualising each claim, you can deal with each claim on it’s own merits.

Refrain from including irrelevant information. This causes frustration and complicates things for the reviewer. Confusion can lead to issues and being misunderstood.

Of course, by submitting a claim, you are hoping to open negotiations. But don’t forget, if those negotiations are not successful, you may end up in a formal dispute resolution process. At this point, you will need to rely on these original claim documents.

Practical tips

Make sure your claim is well presented and includes an introduction and executive summary. Look at the issues and facts you are relying upon, provide assessment of delay analysis or costs or any technical aspects. Finally, summarise the claim and provide conclusions. Take the reader by the hand a lead them though the document to the logical conclusion.

Make it user friendly, well ordered and indexed to make it easy for reviewer to find documents. Include a list of exhibits and appendices and be sure references are unambiguous. Present any documents used as substantiation.

The narrative should be simple and direct. Avoid acronyms and abbreviations – imagine the reader has limited construction knowledge. Try not to use complicated legal language and leave any legal opinions for the lawyers. When referencing contractual clauses, include them in their entirety. Do not paraphrase them.

Finally, when it comes to the conclusions, explain them clearly to the reader. Don’t let them draw their own conclusions – this can be fatal.

Don’t forget to allow time for a peer review to be carried out. Check for errors. It can weaken your position if simple mistakes are found.