COMMERCIAL CONSTRUCTION CONSULTANTS

Claims Management

Situations will always arise where, despite the parties' best endeavours to avoid and mitigate claims, the right to claim and the necessity to pursue it overrules any other considerations. The development of contractual, extra-contractual and ex gratia claims should be conducted within the framework of those Best Practice Procedures advocated by Lancaster House International Consulting. Absolute clarity should prevail as to the application of a contractual right rather than seeking to recover loss and expense due to one's own errors in the pre and, or post contract stage. Claims prepared and submitted through misunderstandings, ill devised procedures and techniques, misplaced opportunism and a general lack of expertise in understanding contractual provisions, inevitably lead to disappointment, dispute, poor levels of recovery and a significant deterioration in business relationships.

Contemporaneous, accurate and complete records are the absolute cornerstone of any good claims management system, as is the expertise to recognize potential claims and act accordingly. Following on from this, it is essential that claims are prepared and submitted at the time of the causal event arising, not months afterwards or at project end; records may be lost, recollections fade, personnel may move on and the claim itself may become time barred. Recognizing where a contractual right exists and where it does not, no matter how persuasive the argument, is fundamental and verifying the facts and circumstances is just as important.

Under the principles of contract law, it is the prosecuting party's responsibility to prove their case beyond reasonable doubt.

Another fundamental element to successful claim prosecution / defence is effective communication between all departments in a client organization. Our many years of experience in dealing with claims has shown that poor lines of communication within the project team are regularly the cause of eroding claim validity or the level of recovery, even to the point of total invalidation.

When analysing the nature of a claim, its origins and validity under the contract, it can be regarded as falling under one of the following seven distinct categories, each of which will include a number of types of claim (mentioned examples):
Claims arising from:

i. tender and contract documents - (covering letters / form of tender / letter of intent / qualified acceptance / BoQ's / formal agreement
ii. execution of the work - (subsoil conditions / physical conditions / omitted works / further drawings & instructions / damaged works)
iii. payment provisions - (contract work / varied work / preliminaries adjustments / prolongation / delayed payment / under certification / set off)
iv. time - (extensions of time for delay / design errors / late instructions / extra works / weather / force majeure / suspension / prolongation / acceleration / quantum meruit)
v. default, determination, etc. (incorrect deduction of liquidated damages forfeiture / frustration / economic dislocation)
vi. compound & global claims
vii. breach of warranty, misrepresentation and negligence

Through our extensive experience, we have found that responsibility for claims management is often assigned to individuals who have neither specialist training nor a sufficient level of expertise. Consequently, it is often the case that claims are inadequately and inefficiently prepared. This of course results in an unacceptable level of success and frequently leads to serious damage to the business relationship. Claims management can only be truly successful where clearly defined Best Practice Procedures are in place, tasks are regulated accordingly and client management recognize when external expertise is required. Even where our client's consider that their staff are well equipped to achieve the required results, the fact remains that there is no substitute for the specialist skills and experience which Lancaster House International Consulting possess.

To maximize the results from claims, our expertise is available to our clients in the following:

  • Investigation, Appraisal and Evaluation of Claims Submitted & Received
  • Research, Preparation and Substantiation of New Claims
  • Negotiation & Settlement of Claims Submitted & Received
  • Analysis of Contract Documents and Claims for Future Reference
  • Reference to our Technical Library & Database

 

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Through our extensive experience, we have found that responsibility for claims management is often assigned to individuals who have neither specialist training nor a sufficient level of expertise

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