190 days delay, £500k cost claim

Our client was having some difficulties progressing its time and cost entitlements with its main contractor client. There was a 190-day delay to the completion date, and our client had suffered losses of more than £500k due to prolongation of its resources.

We undertook an initial review of our client’s position and whilst it had been awarded 99 days and paid circa £100k of its losses, the balance was disputed. We found that there were some deficiencies in the way the claim had been made that invited criticism from their client alongside their view that the prolongation costs also included prelim thickening. We worked with our client to address these deficiencies and ensure its claims for time and money were made compliant with the contract and with all the relevant particulars provided.

Our client wished to negotiate the final account but, if this was unsuccessful, it wanted any submission to at a standard that it could use in an adjudication.

Our approach as their construction claims consultancy

We split the workload into two activity streams. As 99 days had been awarded, our work needed to focus on substantiating the loss and/or expense. The 91-day balance of time would need to be demonstrated from an entitlement, time and cost perspective so this was more involved.

Our client had commissioned a delay expert to prepare a report to support its entitlement to time, which we were asked to use. The first issue we found was the findings by the expert did not align with the EoT granted or the EoT requests issued by our client. We discussed the options with our client and agreed that our client’s position would be stronger if it used the findings or the expert report and explained or clarified any discrepancies with information previously issued.

When we looked at the cost submission, it needed development to stand up to scrutiny. It had not been made on an actual cost basis, there was no evidence to support the resources claimed, and there needed to be more detail about who the resources were and what they were doing.

By extracting the cost information, the roles involved in the project and the information within the Contract Sum Analysis, we were able to understand if the prelims claimed were representative of the prelims included within the loss and expense dismissing client’s statement that the prelims were inclusive of prelim thickening.

We prepared a valuation on an actual cost basis, and it was less than the client’s valuation. This presented two options, either it kept its valuation high and maintained its current submission or it made a much stronger and credible, but lower, submission based on actual costs. Through discussion, our client agreed that if this was to proceed to adjudication then submitted a credible and substantiated claim would increase its chances of an outcome in its favour.

The outcome

We produced, and our client submitted, a fully substantiated claim report which incorporated our client’s expert delay report and linked this information to contract entitlement and loss and/or expense whilst providing our client with the information required to dismiss their clients’ statements of the claim being purely prelim thickening.

This put our client in a position where it could successfully negotiate the final account with its main contractor client.