claim preparation and project records - 2014 olswang construction law conference

2014 Construction Law Conference: Claim Preparation and Project Records Thursday, 6 February 2014

Ben Worthington, Senior Associate [email protected] | + 44 20 7067 3541 | @disputes_lawyer

Introduction

Why are project records important?

•  Record keeping under the standard form contracts

•  Contractual requirements for keeping records

•  FIDIC

•  JCT SBC

•  NEC

•  Establishing claims

•  Common deficiencies

•  Practical guidance

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Why are project records important?

Claims

•  Management of change

•  Loss of trust

•  Entrenchment of views

•  Poor record keeping will be found out!!


Requirements in standard form contracts – FIDIC

Monthly progress reports

•  Detailed descriptions of progress relating to design, manufacture, delivery to site, construction, erection and testing;

•  Photographs showing the status of manufacture and progress on the Site

•  Where Plant and Materials form part of the Works, details of the manufacturer, inspections made by the contractor, tests, and key dates of manufacturer, shipment and delivery

•  Lists of notices given by either party



Monthly progress reports (continued)

•  Safety statistics

•  Comparisons of actual and planned progress, with details of any events or circumstances which may jeopardise completion with details of measures being adopted to overcome delays



Establishing claims under FIDIC

“The Contractor shall keep such contemporary records as may be deemed necessary to substantiate any claim… the Engineer may, after receiving any notice under this Sub-Clause, monitor the record-keeping and/or instruct the Contractor to keep further contemporary records…” (20.1)


Requirements in standard form contracts – JCT 2011 SBC XQ

Claims for extensions of time (2.27)

•  The contractor must:

•  give notice of actual or likely delay

•  give particulars of the expected effects of any delay

•  “shall… supply such further information as the Architect/Contract Administrator may at any time reasonably require."


Requirements in standard form contracts – JCT 2011 SBC XQ

Claims for loss and expense (4.23)

•  Contractor must submit:

•  “…such information as should reasonably enable the Architect/Contract Administrator to form an opinion; and

•  “… such details of the loss and/or expense as are reasonably necessary for such ascertainment.”


Requirements in standard form contracts – NEC 3

All important communications must be in writing as verbal communications have no contractual relevance

•  Stringent requirements in respect of the provision of programming information

•  Disallowed Cost –

•  “Disallowed Cost is cost which the Project Manager decides

•  Is not justified by the Contractor’s accounts and records…” (11.2(25))


Requirements in standard form contracts – NEC 3

“The Contractor keeps these records

•  Accounts of payments of Defined Cost,

•  Proof that the payments have been made,

•  Communications about assessments of compensation events for Subcontractors

•  Other records as stated in the Works Information” (52.2)


Establishing claims

•  The claimant will need to show:

•  Contractual pre-conditions

•  The other party was contractually responsible for the event (liability)

•  Loss was actually incurred (damage)

•  Such loss was caused by the event for which the other party was responsible (causation)


Establishing claims

•  John Doyle v Laing (2004)

“For a loss and expense claim to succeed, a claimant must aver and prove three matters: first, the existence of one or more events for which the defendant is responsible; secondly, the existence of loss and expense suffered by the claimant; and thirdly, a causal link between the event or events and the loss and expense."


Establishing claims

•  To establish entitlement as a result of a delay will require:

•  Documents

•  Witnesses of fact

•  Delay analysis


Establishing claims

•  Keating (9th Ed):

“Delay analysis should be based as far as possible on contemporaneous evidence of what actually happened on site during the progress of the works… [it is] only as reliable… as the data upon which it is based. It should be emphasized that such analysis, of course, can never be a substitute for relevant and convincing factual evidence.”


Establishing claims

Great Eastern Hotel Company Ltd v John Laing (2005)

The delay analysis took "no account of actual events which occurred on the Project and gave rise to a hypothetical answer".


Establishing claims

Cleveland Bridge UK Ltd v Severfield–Rowen Structures Ltd (2012):

“it is necessary to show that the claiming party was actually delayed by the factors of which it complains; it simply does not follow as a matter of logic, let alone practice, on a construction or fabrication project, that, simply because a variation is issued or that information is provided later than programmed or that free issue materials are issued later in the programme than envisaged originally, the claimant is delayed.”


Establishing claims

In summary:

•  Claims must be based on reality

•  Positive evidence of causation

•  Tribunals are essentially concerned with practical issues, not theoretical arguments about delay analysis


Common types of deficiencies

•  Project documentation often turns out to be insufficient, inaccurate or unreliable

•  Failure to identify actual man hours and costs associated with discreet items of additional work or additional time

•  Failure to record productivity by activity

•  Failure to record day to day reporting of what is happening on the site, through progress reports, diaries etc


Common types of deficiencies

•  Why do problems occur?

•  Low priority

•  Expensive

•  Pressure

•  Experience


Practical guidance

•  Contemporaneous documents

•  Contractual requirements

•  Robust procedures

•  Training

•  Auditing

•  Types of documents:

•  Programmes

•  Work records

•  Records that explain delay

•  Costs records


claim preparation and project records - 2014 olswang construction law conference

Real Estate

standard form contracts

standard form contracts

claims keating

project records important

materials form

contemporary records

sbc xq claims

existence of loss