WK10PM - JCT Claims Flashcards
Q1. The traditional approach to managing change in construction projects is normally dealt within three separate elements. How does JCT deal with these? (How does NEC4 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.
This is very different to NEC4.
Q2. 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.
Q3. Give me examples of types of instructions that may be issued that may allow a MC to claim L&E
Postponement of the works
Expenditure of provisional sums
Opening up of the works
Discrepancies between documents
Q4. Give me examples of acts or omissions by the Emp or his team that may allow a MC to claim L&E
Late receipt of instructions
Non-compliance with CDM
Failure of employer to give access
Delay in appointing Statutory bodies etc.
Q5. 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
Q6. 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.
Q7. What does the MC have to demonstrate within a L&E claim? Give examples of the 4 elements. (Does this apply to compensation events?)
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 matters
Q8. Detail the various heads of claim when producing a loss and expense claim and provide examples of how each item may be quantified. (Please note I am not going all through the examples here but you will need to provide some if asked in the presentation)
CA responsibility to ascertain L&E, Often MC submits claim and QS checks it. MC will divide up into different headings / costs;
Site overheads-
• Prolongation costs
• Disruption costs
Head office overheads or site establishment
-Difficult to calculate - can use formula
- Uneconomical working
- Uneconomical procurement
- Loss of profit
- Acceleration
- Interest
Formulas - Hudson, Emden and Eichleay.
Q9. 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”.
Q11. What is the difference between disruption and prolongation claims? How can a contractor claim for disruption?
Prolongation - additional cost incurred incurred as a result of completion of works being delayed (usually by Emp).
Disruption - Loss of productivity due to hindrance or interruption
‘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.
Q12. What would you claim if you received an instruction to divide a room into 2 separate rooms when the project was almost complete?
Claim as a RE and RM. Requires both extra time and cost.
Q16. What is the aim of a claim?
This can be as a result of problems such as delays, changes, unforeseen circumstances, insufficient information and conflicts.
Claims might be made for things such as loss and expense, extension of time and liquidated damages. The contract should set out exactly what can constitute a claim and how it should be dealt with.
Q15. 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.
Q13. What is meant by the term uneconomical procurement?
Doors – purchase 1000 at discount price
Additional doors/changes – wont get competitive price so will be entered as a L&E
