Loss and Expense

Question 1

What is loss and/or expense?

Answer 1

Reimburses the contractor for direct loss and/or expense incurred in carrying out additional work or from an employer’s breach of contract

Question 2

What are the relevant clauses in JCT D&B 2016 with regards to loss and expense ?

Answer 2

4.19 to 4.23

Question 3

What are the procedures for claiming loss and expense?

Answer 3

• As soon as a the regular progress of the work is affected, or is likely to be affected, or the contractor becomes aware of any other matter that would cause them to incur loss and expense, they should notify the employer in writing
• He should submit any further information as requested by the Employer
• He should submit any further information as requested by the Employer to enable the amount of loss and expense to be ascertained

Question 4

What are Relevant Matters?

Answer 4

The events that entitle the contractor to loss and/or expense, along with deferment of possession of the site

Question 5

What are some relevant matters?

Answer 5

1 - Failure to give contractor possession of the site.
2 - Failure to give contractor access to the site.
3 - Failure of the client to supply materials
4 - Disruption caused by works being carried out by the client

Question 6

What are the headings are included loss and expense applications?

Answer 6

a) Prolongation (extra site overheads i.e. preliminaries)
b) Thickening of preliminaries (e.g. extra supervision required due to variations)
c) Disruption (causing plant / labour to be underemployed – hard to prove)
d) Increases in labour / material costs during the period of delay
e) Head office overheads
f) Loss of profit (commonly combined with head office overheads)
g) Finance charges (i.e. interest)
h) Acceleration costs
i) Claim preparation costs

Question 7

Once loss and expense is ascertained how is it added to the contract sum?

Answer 7

• Should be added to the contract sum immediately and paid in the next interim certificate
• It is NOT subject to retention

Question 8

With regards to loss and expense, What is a global claim?

Answer 8

• Where there is no attempt to separate out all of the difference causes and their effects
• It lists a whole load of causes of delay / loss and expense and gives the overall effect