What Makes a Successful Construction Claim?
Posted on June 13, 2019 | ⌚ 2 min read
A construction claim is simply an assertion of a parties right under contract or law. Claims are very common in construction industry, and claims made by a contractor usually equates to a considerable amounts of money/time.
It is not an easy task to review and evaluate the claimant's entitlement to any rights, and as such, a claimant must look to convince the reviewer (and the other party) of his right to compensation and magnitude of such compensation.
I am surprised by the amount of poorly constructed claims submissions that claims huge amounts of money in compensation.
Many claims I have come across consist just of a huge spreadsheet/list of calculations of the magnitude of the claimed compensation without any elaboration to how and why the claimant should be considered for any compensation initially.
Inevitably, the claim submission was rejected, as the burden of proof does not fall on the other party's shoulders.
In my opinion, a proper claim should at least tick the following boxes:
A well formatted and presented claim reflects the professionalism of the company and the individuals creating it. Dog eared submissions, lack of numbering / table of contents, poor quality of paper, lack of cross-references or lack of logical flow of the contents gives the reviewer a nightmare, and reflects a bad image of the people and the company behind the claim.
Clear, Consistent Writing Style
Ideally, the terminology used in the contract should be used in the claim submission. Any additional project specific words / abbreviations should be defined in a dedicated Abbreviations and Definitions section. Clear, consistent write style does a great job of getting the idea across without any ambiguity.
Include a Summary for the Top Management
A summary section such an Executive Summary helps people involved at a higher level quickly skim and understand the premise of the claim and the amount claimed, without getting in to too much details.
Claims are Drafted by Professional Contract Administrators or Engineers
Preparing a claim is no simple task, and it requires full specialized knowledge of the contract and governing law. It is common to leave the claim preparation to other project personnel who are usually not involved in-depth with the contract, and lack sufficient knowledge of the governing law. This effectively produces a claim without sufficient substantiation and entitlement and could be rebuked easily.
Describe Each Event in Detail
While presenting the events in connection to the claim, it is a good idea to follow the approach of detailing the cause, the effect, the entitlement and substantiating properly all parts of the claim.
- The Cause is the description of the event giving rise to the claim.
- The Effect is the description of how the event has give rise to the claimed compensation.
- The Entitlement is the description of why and how the claimant is entitled for a compensation due to the event. It may also be effective to show that the claimant has done all actions necessary to actually mitigate/avoid the delay event.
- The Substantiation is the proof that all the reasoning, assumptions, narratives and calculations included in the claim are true and backed by documents.
A proper claim should have the previous points at a minimum, which would increase your claim's chances of review and success.
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