L&E Flashcards
Should the quantity surveyor include payments for loss and expense within interim valuations?
Only if instructed to do so by the contract administrator. If the contract administrator accepts the contractor has a valid claim, and instructs the quantity surveyor to ascertain the financial entitlement, then this should be assessed and included in interim valuations but without any retention held against it.
What were the heads of claim you would assess a L&E under?
A claim for loss and expense should be for the Genuine loss borne by the contractor as a result of the impediment. It should be pure reimbursement for losses the contractor has incurred. The heads of claim in a loss and expense claim should be;
Time Related Preliminaries (Longer on site)
* Thickening of Preliminaries (Extra supervision)
* Disruption Costs
* Increases in Labour or Materials
* Head Office Overheads
* Loss of Profit
* Finance Charges
* Acceleration Costs
* Claim Preparation Costs
Are you aware of the timescales for assessment under JCT 2016? (L&E claim)
JCT 2016 require the contractor to submit its initial assessment of the likely effect of the relevant matter as soon as reasonably practicable and then provide a monthly updated assessment.
The EA/CA then has 28 days (in respect of the contractor’s initial assessment) and 14 days in respect of subsequent assessments to ascertain the loss and expense claim.
The contract provides that the amount ascertained (on the basis of its monthly assessment) is added to the contract sum
What is loss and expense?
Additional costs or losses incurred by the contractor through the regular progress of the works being materially affected dueto a Relevant Matter occurring for which the employer is responsible. It should be assessed based on direct costs.
What are the typical headings for a loss and expense claim?
- Prolongation
- Disruption
- Loss of profit
- Increased head office overheads
- Additional material purchase
- Inflation
- Interest
EOT - Can you list some Relevant Events?
- Clause 2.26
-Variations - Exceptionally adverse weather
- Statutory undertaker’s work
- Specified perils
- Deferment of possession of the site
- Force majeure
- Statutory powers enforced by Government after the base date
- Strike affecting trade on works or engaged in manufacture or transportation of goods or design work for the CDP (Stevenage)
- Civil commotion or terrorism
- Impediment, prevention or default by the Employer
L&E - Can you list some Relevant Matters?
- Variations
- Instructions for opening up the works for inspection (unless that shows the work not to be in accordance with the contract)
- Delay in receipt of permissions or approvals
- Compliance with instructions regarding antiquities /archaeological finds
- Impediment, prevention or default by the Employer
What is a Relevant Event?
In clause 2.26
Categories of events that if they cause a delay to the Contractor, they are entitled to an EOT. May be neutral events or the fault of the employer
What is the process for granting an extension of time under the JCT?
-As soon as the contractor becomes aware that the works are in delay, or are likely to be delayed, they submit notification to Employer (Clause 2.27)
-The contractor must then submit further particulars in order to allow for an assessment of the delay
- From this, the architect / CA has 12 weeks in which to make a decision. (Clause 2.27)
- Employer must state the amount of time awarded and the Relevant Event against which it has been awarded. Must be fair and reasonable
- Where completion is within 12 weeks, Employer is to notify new completion date prior to existing completion
- Where EoT is granted, time awarded for extension must be reviewed within 12 weeks of PC (cannot take back time)
You’ve mentioned Extension of Time and Loss and Expense, how are those two points set out in the Contract?
Relevant Event (2.26) and Relevant Matter (4.21)
What are Extensions of Time?
Occur when progress is delayed due to events that are the employers responsibility, defers the contract completion date
Due to client or third party
Contractors apply for to avoid LADs
What are examples of force majeure?
- Epidemics / pandemics
- Unforeseen changes in legislation
- Exceptionally adverse weather (fires / flooding)
- War
What is force majeure?
unforeseeable circumstances that prevent someone from fulfilling a contract.
What complications can arise from force majeure?
Needs to be specific enough to prevent disputes but flexible enough to cover events that are unforeseeable
