Loss and Expense Claims

A modern, well-drafted construction contract will provide for the contractor, or sub-contractor, to recover costs they have actually and correctly incurred. This is likely to be as a result of works being materially affected by certain events for which the other party is contractually responsible.

All too often we see poorly drafted and inadequately analysed construction claims lacking in detail (usually issued at the end of the project) or without timeous notices; these are often easily defeated or dismissed out of hand.

Ensuring that you have the correct information, collected at the right time, in the correct format for analysis, is vital. 

What is included in loss and expense claims?

In our experience most of the claims that we see for loss and or expense relate to critical delays resulting in prolongation costs. These items can usually be divided into two distinct categories: on-site and off-site items.

On site items can include:

  • Site accommodation
  • Management staff 
  • Insurances

Off-site items can include:

  • Finance charges
  • Profit
  • Head office overheads

Does Critical Time Delay/Extension of Time always equal additional money? 

It is important, however, to remember that critical delay on a project does not automatically equate to the recovery of actual costs. 

Matters such as weather and force majeure are usually cost-neutral events and provide relief only from liquidated and ascertained damages (LAD’s).

Disruption

Disruption is often overlooked by contractors and sub-contractors alike and yet it can have a big impact on their cashflow. It is an event, or series of events, that can include non-critical time costs which impact upon a contractor’s ability to work efficiently. 

Loss of production can be due to matters such as:

  • Late information 
  • Variations
  • Work by others

We also have experience of using a measured mile-based approach for demonstrating loss and expense on linear projects like motorways.

Contract Experience

Our experience covers a wide range of contract forms including:

  • JCT
  • NEC
  • FIDIC
  • ICE
  • ICHEME

Dynamic Processes 

We are also constantly developing cutting-edge insightful ways to demonstrate loss and expense. We have developed processes to plot resource movements demonstrating the loss of productivity caused by out of sequence movements around site. If you have the data, then chances are we can provide a leading innovative solution to demonstrate the loss and expense incurred.

Get in touch for your free no obligation discussion about how we may be able to help with your construction matter.