Construction Claims Responses: The Consultant and Client Perspective
Construction claims are an inevitable part of most projects. From the consultant’s and client’s perspective, the way claims are handled can significantly impact the project's financial and legal outcomes. A reliable claim review process and timely responses are critical to ensure a fair and quick resolution avoiding the need for time-consuming and costly escalation methods like arbitration or litigation. In this article, I explain the following consultant's roles in claims management.
1. Early Intervention
The consultant’s responsibility begins long before a claim is formally submitted. Timely and accurate responses to the contractor notices and queries ensure the project remains on track and help prevent disputes. The consultant should also provide adequate responses to the contractor's delay notices.
Timely responses to notices and schedule submissions are critical. If the consultant delays responses, say by a year or more, the contractor may argue that the lack of objection implied consent which makes the delayed response invalid. This can weaken the client’s position, resulting in unfavourable outcomes in disputes.
2. Reviewing Claims
When a contractor submits a claim, consultants conduct the review which typically involves the following:
2.1. Reviewing Submitted Documents
The contractor’s claim often includes a package of supporting documentation such as:
The consultant’s first task is to confirm whether these documents align with the contractual requirements. For example, was a notice submitted within the stipulated timeframe after the event occurred?
2.2. Delay Analysis
Every delay analysis method has its own advantages, disadvantages, strengths, weaknesses, uses and limitations. First, ensure that the selected method is appropriate. Otherwise, if the method is not suitable for the project circumstances, the whole claim can be thrown out of the window. For example, in a large complex project, you'd better have a very good reason for why you would choose weak methods such as Impacted-As-Planned in your analysis.
2.3. Counter-arguments
The consultant often reviews the contractor's claim submission as it is. In other words, the consultant is in the defence mode. However, consultants are recommended to prepare counter-arguments. For example, the consultant can prepare its own delay analysis, identify contractor's risk events and even create fragnets that evaluate the contractor's delays. In these cases, it is not uncommon to have a claim response that is bigger than the claim itself.
2.4. Drafting the Outcome
The outcome of the review typically falls into one of three categories:
3- Timely Responses
If a consultant fails to respond to a schedule update or notice promptly, this could weaken the client's case. The contractor may argue that the delay implies acceptance of their claims or position. Moreover, regular schedule updates and progress reports are required for a good reason which is to help project parties understand the progress status and take an appropriate action based on what they see in the report. Therefore, if the consultant took one year to respond to a schedule update, the response doesn't really help anyone at this stage. As a result, most contracts require notices and claims to be submitted within strict timeframes. Contractors who fail to comply with these requirements risk their claims being rejected entirely. Late submissions - whether by the consultant or the contractor often result in unfavourable outcomes to the responsible party.
Contractors sometimes believe that submitting claims at the end of the project without notices will be just as effective as timely submissions. This approach is Naïve: The lack of timely notices as required by the contract can invalidate claims entirely. In practice, notices are meant to inform all project parties of potentials delays and encourage them to work together and mitigate the impact. Waiting until the end of the project ignores the importance of contemporaneous records and notifications which will make the claim open to significant challenge by the opposition.
Regards,
Planning Engineer | Expert in Project Scheduling | PMP®
5dVery helpful.. Thank you for sharing Eng. Osama