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PREPARATION AND EVALUATION OF CLAIMS FOR REIMBURSEMENT OF ADDITIONAL PAYMENT AND EXTENSIONS OF TIME

EXTENSIONS OF TIME AND LIQUIDATED DAMAGES

INTRODUCTION

This session focusses specifically on contractual and legal rights and remedies in regard to claims relating to time, namely claims for extensions of time and liquidated damages. Delay claims are crucial to any business as Employers need to recover losses they sustain for projects delivered late, whilst contractors need to be excused for delays that are not their fault to avoid being subject to damages. This workshop will focus on specific contractual and legal remedies with practical examples to highlight good practice and also typical pitfalls that can detrimental to any organisation involved in contracting.

COURSE CONTENT

  • Time obligations generally (an explanation of legal obligations referred to as time at large and time of the essence and their implications

  • The Baseline Programme (the importance of creating a robust and realistic baseline programme and what to include following principles in Balfour Beatty v London Borough of Lambeth)

  • Revisions to the programme (the importance of revisions, recording actual progress and monitoring the critical path(s) and dealing with mitigation measures)

  • Grounds for extensions of time (a look at qualifying delays entitling a contractor or subcontractor to an adjustment of time obligations, including adverse weather, wind speed and unforeseen ground and physical conditions)

  • Delay notices (example model notices of delay, notice periods and the effect of notices being conditions precedent to entitlement, recognising conditions precedent)

  • Methods of delay analysis compared (a look at prospective and retrospective methods of assessing delay and which is more effective)

  • Concurrent delay (a commentary on what is concurrency and is the Contractor entitled to an extension of time)

  • Notices of Non-Completion (obligations on employers to issue notices of non-completion and example notices)

  • Liquidated Damages (calculating LAD’s, a legal update on judging whether a rate of LAD’s is a penalty, claiming LAD’s after termination, LAD’s inserted as Nil or N/A)

  • General Damages (a look at the alternative to LAD’s in respect of general damages for delay and the legal position, including passing down to subcontractors)

LEARNING OUTCOMES

All attendees will gain a practical understanding of how to prepare and evaluate claims for extensions of time and the importance of notices. The session will demystify the complexity of the different methods of delay analysis and which is the most appropriate in the circumstances. Employers will then learn how to properly calculated rates of liquidated damages and will know the parameters of what constitutes an unenforceable penalty.

DURATION OF WORKSHOP

Half Day

PREPARATION AND EVALUATON OF PROLONGATION AND DISRUPTION CLAIMS

INTRODUCTION

This session focusses specifically on contractual and legal rights and remedies in regard to claims relating to additional cost and loss and expense. The  most significant claims are claims seeking additional reimbursement of loss and expense incurred directly due to qualifying delays that which extend the contractor’s or subcontractor's site management and establishment longer than planned. Additionally, claims relating to out of sequence and unproductive working, otherwise referred to as disruption claims are also cause for conflict. Disruption claims are notoriously difficult to justify so this session will give a practical insight on how disruption claims should be presented, along with the required records. The session will deal with a hypothetical claim to give a practical and interactive walk-through of what a successful claim should look like.

COURSE CONTENT

  • Background to claims and negative perceptions of claims (the culture of claims and why they are source for disputes)

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  • Matters entitling contractor’s and subcontractor’s to loss and expense (weather, ground conditions, breach events)

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  • Notices of loss and expense (exemplar drafting, timing of notices, conditions precedent and compliance with the relevant contract conditions)

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  • Global or total cost claims (What is a global or total cost claim and should claims presented in this way be rejected out of hand or not – practical examples and case law examined here)

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  • Prolongation claims

    • Claims for extended site management and establishment;

    • Claims for interest on late payments of retention due on  practical completion;

    • Claims for loss of head office overheads and profit;

    • Claims for material and labour price increases

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  • Disruption claims

    • Examples of loss of productivity and out of sequence working;

    • Methods of assessing claims for disruption – measure mile, earned value, tendered outputs verses actual outputs and the nature and quality of records required;

    • Thickening of preliminaries (claims for additional site management and resource due to disruption and stacking of trades)

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  • Variations (Assessing loss and expense in regard to variations that serve to delay or disrupt progress)

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  • Negotiation and settlement of claims (tips on negotiation of claims to achieve satisfactory settlements)

LEARNING OUTCOMES

All attendees will gain a practical understanding of the matters that give rise to various claims under construction contracts. Attendees will also acquire knowledge of how to prepare and evaluate claims by reference to the relevant contract conditions and how to keep important records to maximise financial recovery.

DURATION OF WORKSHOP

Half Day or Full Day

INSTRUCTIONS AND VARIATIONS

INTRODUCTION

Contractual provisions providing for instructions for variations is one of the most fertile grounds for creating disputes concerning the value of the work, whether arising under interim valuations or at final account. Disputes arise primarily due to uncertainty about whether variations have been properly instructed and the manner in which variations are valued, including entitlement to extensions of time in the event of delay. This workshop focusses on this area of contract administration to demonstrate the effective administration of instructions and variations properly to avoid protracted disputes and maximise entitlement.

COURSE CONTENT

  • Instructions (do verbal instructions have any contractual effect? are written instructions a condition precedent to being paid for a variation?)

  • Consent or instruction (if the employer consents to using lesser quality materials and goods, is this treated as an instruction for a negative variation?)

  • Variations (an examination of the different definitions of variations, including those in typical contract amendments. Does this extend to varying working hours and the proposed sequence of work?)

  • Quotations for variations (an overview of how main standard forms include procedures for quotations for variations, including all time and cost effect)

  • Valuation of Variations

  • Obligations to use rates and prices in a bill of quantities or other pricing document to value work of similar character and quantity (does this apply if the original rate was abnormally high or low due to a pricing error?)

  • Star rates or analogous rates (How you adjust tendered rates and prices for similar work but with different circumstances, such as more labour required or more expensive materials?)

  • Daywork (conditions of daywork, such as submission of daywork sheets and instruction to value on daywork)

  • Fair valuation (what is a fair valuation and does this automatically include for a contribution to head office overheads and profit)

  • Omissions of work (can an employer omit work and distribute to others? Can an employer omit all of the work or large parts without consequence?)

  • Preliminaries (If the variation causes a delay, does the valuation take into account any additional or extended preliminaries?)

LEARNING OUTCOMES

All attendees will acquire a thorough understanding of the law and contractual provisions relating to instructions and how to apply the appropriate valuation rules to different types of variation. This will assist in ensuring your commercial teams apply the rules correctly to maximise financial entitlement and profitability.

DURATION OF WORKSHOP

Half Day

NEC 3 & NEC 4 – ASSESSING COMPENSATION EVENTS

INTRODUCTION

This course is a ‘spin-off’ from the NEC 3 and NEC 4 workshop that focusses specifically on, what is probably considered the most contentious aspect administering an NEC contract, this being the assessment of a compensation event. This workshop is designed for Project Managers, Contractors and Subcontractors who already possess a sound basic understanding of the NEC. The session will provide a detailed practical workshop of the assessment of a compensation event from the point of raising an early warning notice to when the compensation event is implemented.

COURSE CONTENT

  • Working in a spirt of mutual trust and co-operation (clause 10.1 – is there an obligation to act in good faith and how does obligation work in practice in specific regard to the assessment of compensation events

  • Early warning notices (using real-life examples, a look at how early warning notices should be drafted and recorded on an early warning register, sanctions for not issuing early warning notices)

  • Notification of compensation events (an example of how compensation events should be notified and the timing of such notice; the project manager’s or main contractor’s obligation to reply)

  • Instructions and proposed instructions (a look at instructions for compensation events and proposed instructions and the obligations relating to compliance before such compensation events are implemented)

  • Assumptions for uncertain effects (how to properly administer and apply stated assumptions for compensation events when the effects are too uncertain to price accurately in a quotation)

  • The dividing date (prospective versus retrospective assessment (an explanation of when the assessment is carried out as a forecast or using actual cost)

  • Assessing the effect on Defined Cost (How to assess the effect on Defined Cost, using rates and prices in the activity schedule or Bill of Quantities, applying the Schedule of Cost Components and what should be included in the Fee)

  • Assessing the effect on the Completion Date (the distinction between planned completion and the Completion Date, impacting the effect of compensation events on the last accepted programme and what happens if the last accepted programme is weeks old? Who owns both free and terminal float)

  • Time risk allowances (how to properly make allowances for cost and time effects in quotations and how these are shown and highlighted on any revised programme)

  • Rejecting quotations (grounds for rejecting quotations examined)

  • Implementation of compensation events (how compensation events are implemented and included on the activity schedule or Bill of Quantities)

LEARNING OUTCOMES

The attendees will require a practical understanding of the entire compensation event procedure and how compensation events should be assessed properly in accordance with the NEC ethos, including the different timescales relating to notices, assessments and implementation.

DURATION OF WORKSHOP

Half Day

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