JCT Claims Flashcards
The traditional approach to managing change in construction projects is normally dealt within three separate elements. How does JCT deal with these?
Contractors claims for change – e.g. variation – will get paid using the valuation rules – instruction of variation through an interim valuation.
Claim for an extension of time.
Claim for loss and expense.
Main contractor must individually claim for each.
Divide the following clauses into neutral events and “at fault” events i.e. where a loss & expense claim may be recoverable.
• Variations - Yes
• Compliance with AI’s - Yes
• Inaccurate forecast of approximate quantities - Yes
• Civil commotion, use or threat of terrorism - No
• Strike, lock out etc. affecting trades employed -
No
• Government intervention - No
• Deferment of possession - Yes
• dealing with antiquities - Yes
• Force majeure - No
• Impediment, prevention or default by the
employer - Yes
• Carrying out of work by a statutory authority - No
• Exceptionally adverse weather conditions - No
• Named specialist becoming insolvent - No
• Loss or damage by one or more of the specified
perils – No.
Give me examples of types of instructions that may be issued that may allow a MC to claim L&E
- Variation
* Expenditure of an undefined provisional sums
Give me examples of acts or omissions by the Emp or his team that may allow a MC to claim L&E
• Noncompliance with CDM
• Employer not paying contractor
• Design delays
- not allowing access to site
What is the procedure for notifying a L&E claim?
Application must conform to several conditions
•In writing to the CA, as soon as the likely effect of a Relevant Matter on regular progress or the likely nature and extent of any loss and/or expense arising from a deferment of possession becomes (or should have become) reasonably apparent to him.”
• MC to provide details of loss and expense with
notice
• CA to ask MC for information to enable opinion to
be formed
• Delay must be a “material” effect
• Delay must be caused by deferred possession or
Relevant Matters
What is the procedure for assessing a L&E claim?
• Must asses initial claim within 28 days of receipt
• 14 days of any subsequent update
• CA shall instruct QS to ascertain the amount of
loss incurred
• CA or QS to notify MC amount of L&E payable.
What does the MC have to demonstrate within a L&E claim? Give examples of the 4 elements.
Main principle -
• Cause and effect
• Casual link
JCT –
• That he has incurred or is likely to incur direct loss
and/or expense
• That this loss arises from either
o Deferred possession of the site or
o The regular progress of the works has been or is likely to be affected by any of the relevant mattersDetail the various heads of claim when producing a loss and expense claim and provide examples of how each item may be quantified
• CA responsibility to ascertain L&E
• Often MC submits claim and QS checks it
• MC will divide up into different headings / costs
• Prolongation costs
• Disruption costs
Must be based on actual costs
Why are overheads and profit difficult to claim?
Walter lily case
• A contractor can recover overhead and profit lost as a result of delay if that delay was caused by factors which entitle it to loss and expense (these factors, or relevant matters, are listed in the contract).
- The contractor must prove, on the balance of probabilities, that if the delay had not occurred it would have secured new work or projects, which would have produced a return.
- Using a formula, such as the Hudson or Emden formula, is a legitimate way of determining entitlement on the balance of probabilities.
- “Ascertainment” by the contract administrator of these losses does not mean he has to be “certain”.
Can the cost of producing the claim be included within a loss and expense claim? Why?
no must be direct losses and not consequential…
What is the difference between disruption and prolongation claims? How can a contractor claim for disruption?
‘Prolongation’ refers to ‘the extended duration of the works during which time-related costs are incurred as a result of a delay’. Prolongation element for a claim requires the completion date to be delayed.
‘Disruption’ refers to a loss of productivity due to a hindrance or interruption of the progress of the construction works which reduces the rate of efficiency.
For a disruption claim, evidence must be provided to show that;
• Progress of the works has been disrupted.
• Which element of the works and which trades
have been disrupted, why losses occurred, and so
on.
• The disruption incurred additional costs.
• The cause of the disruption constitutes a breach of
contract.
What would you claim if you received an instruction to divide a room into 2 separate rooms when the project was almost complete?
claim RE and RM as need more time and need materials to cover variation
What is meant by the term uneconomical procurement?
Doors – purchased at 1000 at discount price
any Additional doors/changes – wont get competitive price that was first got so will be entered as a L&E
What is meant by the term uneconomical working?
working slowly or using materials that aren’t needed to finish the job
Can a MC claim L&E without an extension of time being granted and why?
Yes, e.g. change the colour of paint, would not require extra time as can be done when landscaping but would incur extra costs.
or crane to be removed but the employer needs it for an extra day to lift something up to top floor, no extra time needed just cost.
cost related different to time related
