Delay and Disruption Claims in Construction

ISBN 978-0-7277-6197-2

ICE Publishing: All rights reserved

http://dx.doi.org/10.1680/dadcic.61972.083

Chapter 10
Typical claim format
10.1. Presentation
The success of a good claim (and sometimes the success of a poor claim) can often turn
upon a well-presented claim document. It is therefore important that claims are presented in
a user-friendly manner and are easy to read and to understand.

Claims need to be produced in top-quality print using a standard recognised font and type
size, with graphics and photographs well produced and with a cover which explains in
summary terms what is inside the claim document and which, in effect, invites the potential
reader to look inside.

Many claim documents do not satisfy this very basic requirement and are presented in such
a fashion to be uninviting at best, and incomprehensible at worst.

It has often been said that the three most essential items for a successful claim document
are records, records and records. However, the presentation of those records is often just as
important as the records themselves. Therefore, the manner of presentation – in the way of
charts, schedules and other presentation formats – requires careful consideration.

A claim is basically a document which sets out to persuade somebody that the claim is
legitimate and is valid.

It is essential that whatever form of claim is being made, the document produced to support
the claim must be of good quality, as a poorly typed and presented document is unlikely to
be successful in helping to achieve acceptance of the claim.

Many claims are drafted in such a way that it is necessary to read through a great deal of
correspondence, site minutes and records to try to understand the case. This can be a fatal
mistake – it is important that the claim can be read and understood without reference to
other documents. Correspondence, site meeting minutes and other records are usually
essential to corroborate the facts referred to in the text of the claim, but they should not be
used in place of the claim narrative.

It should always be borne in mind that if the dispute is referred to adjudication, arbitration
or litigation, it will usually be necessary to provide oral evidence from those involved with
the project. In such a case, there will be a need for documentary evidence, such as

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 Delay and Disruption Claims in Construction

correspondence, emails and other records, relating to the person with the first-hand
knowledge of the matters in question.

To increase the chance of success, it is essential that a claim document is well prepared and
is presented in an orderly and professional manner. If the claim document is not presented
in such a way, then the recipient of the claim document may believe that the person
presenting the claim document does not really believe in the merits of the claim, and that
they have just ‘thrown the claim together’ in an attempt to gain some unjustified return in
terms of time or money.

10.2. Format
It all starts with the front cover. A front cover of a claim document should contain the
following as a minimum requirement

■ the claimant’s claim

■ the name of the project
■ the claim title or description
■ the date of the claim
■ the revision number or the reference number of the claim.

The purpose of the front cover is not only to create a good first impression, but also to
provide an immediate insight into what is included within the claim document.

The content of a well-presented claim document should be divided into clear sections, each
of which will contribute to a full understanding of the claim. Commonly the division into
sections may be as follows

■ contents
■ introduction and executive summary
■ the parties
■ the contract (or subcontract)
■ the dispute resolution process applicable (if required)
■ the contractual basis of the claim
■ the facts and/or details of the claim
■ the financial evaluation of the claim
■ the redress sought (if required)
■ appendices.

The following sub-sections outline the requirements for each part of the claim document.

10.2.1 Contents
The list of the contents should appear on the first page after the front cover. The inclusion
of a contents page (referenced to page numbers within the claim document) is invaluable
for a reviewer of a claim document, saving them a great deal of time in searching for a
particular topic within the document.

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 Typical claim format

10.2.2 Introduction and executive summary

When producing an introduction, it must be borne in mind that the person reading the
claim, who may well be responsible for the final ascertainment or may need to make a
decision in respect of the claim, is likely to have very little knowledge of the project or the
background to the issues. Therefore, it is important that the claim document sets out some
important background information, including, among other things

■ the names of the parties to the contract

■ details of the conditions of contract governing the contract
■ the dispute resolution process applicable
■ the tender date
■ the original contract sum
■ dates for possession and completion
■ date of completion certificate
■ details of extensions of time claimed
■ details and amounts of money claimed
■ details of extensions of time awarded
■ details of amounts certified.

It essential to go into sufficient (but not excessive) detail in the introduction so that the
recipient of the claim does not need to search through other documents to acquire the basic
facts.

Often it is very useful to have an executive summary at the beginning of the claim
document. An executive summary is in effect a general overview of the entire claim in a
general and shortened form. It sets out the claim in overview terms so that the recipient of
the document can obtain an understanding of the basis of the claim in one short section.

The executive summary must bring out the key elements of the claim and must highlight how
the claim document satisfies the burden of proof in respect of the claim being promoted.

It is sensible to produce the executive summary after the rest of the claim submission has
been completed, as it is only at that stage that the key points and the critical elements of the
claim can be identified.

10.2.3 The parties

It is important that the parties involved with the claim are clearly identified by name and
address.

Where a party is a limited company, it is often sensible to provide the company registration
number in the event of a change of company name (something which does not affect the
legal entity of the corporate body).

The address to be used is often referred to in the contract, but where that is not the case,
either the registered office address or the last known business trading address should be used.

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 Delay and Disruption Claims in Construction

10.2.4 The contract

The contract form used should be set out in detail. If the contract is based upon a standard
form contract, then any amendments and/or additions to the standard form should be listed.

10.2.5 The dispute resolution process

The dispute resolution process that is available in the contract or that is being used in the
particular claim submission (e.g. adjudication, arbitration or litigation) needs to be
identified, with a note explaining why that particular dispute resolution process can be or is
being used.

10.2.6 The contractual basis of the claim

It is of vital importance to spell out precisely the contractual basis on which the claim is
founded.

As the claim document may be read by somebody who has no knowledge of the project at
all, it will be helpful to include a description of the works in this section so that the
reviewer will know what type of work was being carried out.

It is extremely useful to include here the full text of the clauses from the contract that will
be relied upon within the claim document. It will not always be possible to complete this
section until after the rest of the claim document has been completed – often it is not until
then that it becomes fully apparent which of the contract clauses will be relied upon.

The inclusion of the text of the contract clauses in this section obviously makes it simpler
for the reviewer to refer to the clauses, rather than needing to refer to a separate document.
However, it should go without saying that any such clause reproduction must be complete
and must be accurate. Inaccurate and/or incomplete reproduction of contract clauses relied
upon can be more detrimental to the claim submission than if the text had not been
included at all.

The claim will normally fall into one of the following categories

■ a claim for an extension of time

■ a claim for loss and expense or extra costs or expense (depending on the form of the
contract) flowing from a remedy contained within the conditions themselves
■ a claim for common law damages resultant upon a breach of the express or implied
terms of the contract.

It is necessary to decide and specify in this section of the claim document the clauses of the
contract that will be relied upon in the claim or, if appropriate, the common law provisions
that apply.

It is also good practice in this section of the claim document to make reference to
contractual notifications that have already been made. Thus, for extensions of time, details
of the notifications provided, the contractual events/relevant events relied upon and the
extended period(s) requested should be provided; and for loss and expense, details of the

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notifications/applications made, the contractual matters/relevant matters relied upon and the
financial amount requested should be provided.

10.2.7 The facts and/or details of the claim

It is also essential to state clearly the facts or events pertaining to the claim.

A tribunal when deciding upon a dispute over a claim will be required to ascertain the facts
and then apply the law. Therefore, this section of the claim document is critical to the
successful outcome of a claim submission.

This section of the claim should also provide the fullest details possible of any claim issue.

The burden of proving any given claim rests with the claimant (i.e. ‘he who asserts must
prove’). To satisfy this requirement means that claims must be adequately documented,
which means that appropriate records must have been kept at the time the relevant work
was executed.

Contemporaneous records carry much more weight than documents produced after the
event, and claims often fail because of a lack of proper substantiating contemporaneous
documentary evidence.

Some of the more obvious contemporaneous records that could be used as supporting
evidence to any claim would include

■ the tender documentation

■ the contract documents (including the specification, schedule of works etc.)
■ work allocation and record sheets
■ daily or weekly record sheets for labour
■ daily or weekly record sheets for plant
■ daily or weekly record sheets for staff
■ record of materials received and issued
■ drawing register
■ correspondence
■ site, progress and project meetings minutes
■ site diaries
■ requests for information
■ confirmation of verbal instructions
■ early warning notices
■ site instructions
■ compensation event notifications
■ architect’s or project manager’s instructions
■ variation account
■ daywork sheets
■ construction programme
■ accepted programme
■ as-built programme

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 Delay and Disruption Claims in Construction

■ dated photographs
■ dated videos
■ agreed measurements of works ‘covered up’
■ test and inspection plans
■ delay notifications
■ extension of time awards made
■ non-completion certificates
■ practical completion certificate(s)
■ final account details
■ subcontractor records as above (as appropriate).

In respect of delays, for example, the reasons and the causes of the delay should be set out
and it should be explained how the causes of the delay affected the programme and
completion date. This is usually referred to as proving the nexus of cause and effect of
delays – it is one of the most important (and often one of the most difficult) things to do.

Critical path and delay analysis methods can be used to help prove the cause and effect of
the particular delay event. It must be stressed, however, that these methods are only aids to
demonstration and good presentation, and that the basic ground rules must be followed
regardless of these presentation aids.

It is vitally important to remember three phrases which, although related, must each be
considered in its own right. In claims presentation, much confusion results from erroneous
assumptions. The three key phrases are

■ delay
■ extension of time
■ money.

It is very important to remember always that delay does not always bring an entitlement to
an extension of time, and that the granting of an extension of time does not always mean
that a further payment will be due.

In this section of the claim, it would be usual to detail the delays which have been suffered
by the claimant to prove prolongation and disruption to the works. This prolongation need
not necessarily carry an entitlement to an extension of time; for example, where the
programme referred to in the contract shows an anticipated date for completion prior to the
expiry of the contract period.

Before starting this section of the claim, it is advisable to summarise all the correspondence
pertaining to delays. It is also advisable to schedule dates for possession, and to schedule
additional work ordered during the currency of the contract.

As stated earlier, the claim document stands a much better chance of being read if the
person reviewing the claim is not obliged to put down the document to go and search
through other files for documentation. As far as possible the claim document should be

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complete in itself. To this end, when references are made to correspondence in the narrative
of this section, it is essential to attach relevant copies of the correspondence (not all the
correspondence) to the claim document in the form of an appendix. If reference is made to
a programme, it is essential to append a copy of the programme to the claim document,
ideally in such a way that it can be read simultaneously with the narrative. If delays can be
graphically demonstrated by reference to the programme, then this one feature may be far
clearer than a long, rambling narrative.

As noted above, a link must be made between the cause of the problem and its effect.
Presentation of this type of information in a schedule form is advisable as it certainly
makes it easier for others to follow.

10.2.8 The financial evaluation of the claim

In most cases the evaluation of a claim will fall into two parts: costs associated with
prolongation and costs associated with disruption. By far the easiest to consider is the cost
of prolongation. Set out below are some possible heads for the evaluation; obviously they
may not all be appropriate, but it forms a useful checklist

■ remuneration of site staff and incidental travelling expenses

■ plant and scaffolding retained on site
■ temporary power distribution and lighting
■ temporary office and storage accommodation
■ local authority rates on this accommodation
■ electricity accounts for the delay period
■ water rates or accounts for the delay period
■ telephone account for the delay period, including rental and calls
■ additional insurance premiums
■ loss due to carrying out work at a time of the year involving inclement weather
■ attendances on subcontractors over a longer period
■ increased costs (inflation) of labour, plant and material where not otherwise
reimbursable
■ profit and overheads on increased costs reimbursed during the extended period
■ watching, lighting and vandalism
■ safety and welfare measures
■ site clearance and maintenance of temporary roads
■ head office overhead
■ finance charges
■ loss of profit
■ cost of claims preparation.

It must be borne in mind by all involved in claims that absolute proof will be discharged by
the contractor or subcontractor demonstrating their case on the balance of probabilities –
that is, sufficiently to tilt the scales. This, however, must not be taken to mean that amounts
arrived at by theoretical or notional calculations can usually be acceptable, such as
estimates or assessments. Ascertainment involves the ordinary meaning of the word: to find
out as a matter of fact.

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10.2.9 The redress sought

Although this is often the last part of the claim document to be completed, it is usually the
most important part, and it is often the part that is overlooked.

The redress sought section advises the reviewer of the claim document what is being
sought. This may be an extension of time and/or financial recompense; it may request an
interest payment to be made, it may seek recovery of costs, and so on. The important point
is that whatever is being asked for must be clearly set out in this section of the claim
document.

This section becomes even more important when a formal dispute resolution process is
being used as often this section may set the limits of a tribunal’s jurisdiction. The wording
needs to be precise enough, but also wide enough, to allow the tribunal to award the
redress that is being sought. Therefore, in respect of adjudication, for example, if a loss and
expense claim for £500 000 is being sought, then it is usual to seek a payment of £500 000
‘or such other sum as the Adjudicator may decide’, in case the adjudicator decides that the
amount to be paid for loss and expense is not exactly the £500 000 sum being requested.

10.2.10 Appendices
The appendices contain the documents relied upon in the claim submission. It is normal for
the sequence of the appendices to follow the narrative of the claim submission and each
appendix should have a fly sheet explaining in outline terms what is contained within the
appendix (for example, The contract, The relevant correspondence, etc.). The documents in
the appendices must be legible and identifiable.

The appendices should be clearly identified by letter (e.g. Appendix A, Appendix B,

Appendix C etc.) or by number (e.g. Appendix 1, Appendix 2, Appendix 3 etc.). The
documents within an appendix must themselves be clearly identifiable, and this can either
be by way of numbering pages within a particular appendix (e.g. Appendix A Page 1,
Appendix A Page 2, Appendix B Page 1, Appendix B Page 2 etc.) or by way of a
consecutive numbering of the pages throughout all of the appendices.

Whichever approach is followed, it is crucial that the person reviewing the claim (whether
that be a tribunal or simply the party receiving the claim) must be able to quickly and
simply find the required document in the appendices.

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