Sometimes we are asked by clients, why was our claim not successful? There are potentially many reasons for this, but from our experience, the most common and significant reasons that occur time and time again can easily be identified.
We consider there are four major causes:
Number 3: management and presentation of the facts
On larger disputes, extensive records are often involved and the job of unpicking the story and identifying the key evidence is a logistical challenge.
At Kenzie, we are currently working on a €1 billion project in which the letters, minutes of meetings and progress reports extend to 25,000 pages – not including 20,000 drawings.
It is easy to slip into what is known as “analysis paralysis” whereby the exhaustive detail leads to the ‘story’ of the claim being lost.
When making claims related to large-scale projects, the contractor needs to manage the factual research efficiently and ensure that the key elements are ascertained. The story needs to be carefully framed and then developed.
Major projects involve hundreds of delays and potential events, and it is not possible to tell the story of every twist and turn in a presentable, digestible format. The old saying that “80 per cent of the problem is in 20 per cent of the issues” is true in most cases.
A well known barrister once told me: “The side who manages the facts and presents them in the most logical and pragmatic manner, generally has the upper hand in any dispute.” Given that in my experience most claims are 95 per cent about the facts, I would agree.
Number 4: insufficiently detailed quantum
The quantum of a claim should, in theory at least, be the easy bit.
But cost-based claims are often pleaded on a total cost basis, incorporating additional costs that are not caused by events the client is responsible for, and failing to represent the actual costs incurred.
It is rarely effective for a contractor to simply deduct the actual cost incurred from the bid cost and assume that the remainder is the total liability of the client. Contractors have their own inefficiencies, increased costs and delays that must be incorporated into the calculations.
Contractors should avoid claiming for any costs that are not increased by the prolongation of the project, and ‘plug figures’ or assessments should never be used in place of actual costs, which should be evidenced by reference to expenditure records.
Like all the component parts of your claim, the quantum should tell the true story of what happened, the impact of what happened, and why the client is responsible. By sticking to the facts and evidencing them carefully, you can save yourself the time and money that a poorly made claim will cost.
