Construction Claims Management
We possess the highest level of engineering and construction expertise to systematically deal with issues, claims and disputes that arise at any stage of an engineering and construction project, whether it is about design, construction, performance, time, money, variations or contractual matters.
Essca Consulting provides services in claim identification, notification, contractual entitlement, quantification and valuation of claims, claim preparation / documentation, follow-up, negotiation and, settlement. We also provide assistance in defending claims put forward by other parties. We are able to manage or support you and your team in either advancing or defending a claim and have specific expertise in:
- Contractual claims for adverse ground conditions including those arising out of differing site condition clauses and Geotechnical Baseline Reports (GBR);
- Measurement claims including claims for omitted items and substantial increases or decreases in quantities to those stated in the bills of quantities;
- Interim and final particulars for delay and disruption, extensions of time, additional payment, loss and/or expense, prolongation costs, liquidated damages, damages and management of change;
- Forensic delay analysis including both prospective and retrospective delay demonstration techniques;
- Insurance claims (under Contractors’ All Risks, Third Party / Public Liability and Professional Indemnity insurance policies),
- Claims for escalation or inflation (fluctuation in prices of materials and labor) and currency fluctuation (in multi-currency contracts) and
- The valuation of variations, contra charges and defective work.
Our experts are highly skilled at explaining the techno-commercial and legal issues in simple, easy-to-understand terms when presenting the results of our analysis in the forum required (i.e., Engineer / Owner, Mediation, Dispute Review Boards, Arbitration etc.). Our construction industry knowledge provides our clients with the utmost confidence in our analysis and explanation of the nuances and details that accompany construction projects during any phase.
Our Approach
We take time to understand what our clients’ construction claims objectives are and how our consultants may be able to meet those expectations. Early involvement allows our expertise to be used to its best advantage and enables our consultants to provide the most appropriate and effective advice. In fact, if we are engaged early enough, it may be that advice is all that’s needed to avoid a claims issue escalating and becoming a costly dispute.
We tailor our claims management services to suit your requirements, whether pursuing entitlement or in defense and counter claim. You will receive a preliminary report setting out the key issues of claim and recommendations on your prospects of success. This helps you avoid future unnecessary expenditure.
Our quantum evaluation involves a full review of the nature of cost overruns and additional cost. We establish the correct method for evaluation (e.g. bill of quantities, rates or actual expenditure reasonably incurred) in line with the contract provisions. In brief, claim management process will involve following steps:
At this stage, we determine the source of potential claim. For example, design error/omission, scope gap, documentation conflict, hidden/differing site conditions, abnormal weather, and so on.
To be on sound footing, we determine whether or not the claim has any basis in the contract or in law. Our legal advisors also are consulted on the matter if required.
After checking sustainability of the claim based on contract and legal provisions, we evaluate and determine potential success of claims based on established legal precedent and contract documentation and we determine worst case and best case magnitude from each party’s perspective.
Once sustainability and potential success of the claim based on contractual and legal merits are established, we draft notice to be sent by the contractor to the engineer within the time frame stipulated and clarify his intention to claim extra rates/ compensation for the same. This is very important because failure on contractor’s part regarding this shall entail its rejection by the engineer.
We then go into the detailing of the claim to fully establish the claim including its entitlement under the contract, giving reference to the relevant clauses. The claim is supported by necessary backup calculations. Backup documents like letters, vouchers and drawings are also enclosed. For period-related claims such as extended stay costs and interest on delayed payments, we revalidate the claim at periodic intervals and submit the same until the end of the relevant period.
The objective of this sub-process is to determine the impact of the change occurred. We will perform schedule analysis to calculate the time impact while breaking down the cost into various cost components to calculate the cost impact.
The purpose of this sub-process is to give the other party in the contract a substantive description and detail of the extra costs incurred or to be incurred due to a contract change. This detailed cost description is necessary for understanding, negotiating, and justifying extra contract costs. There are two types of claim pricing – forward pricing and post pricing.
This sub-process concerns the process of presenting the claim to the employer, and mutual finding the solution of such claim. If an agreement cannot be reached and any party believed his position is correct, then the next recourse is to go for alternative dispute resolution method. If this also fails, the choice remaining is to implement the contractor’s ‘disputes’ mechanism or take the matter to court.
The Owner/Engineer is supposed to convey his decision on the claim to the contractor within a time frame specified in the contract. If the claim is not allowed, the same needs to be stated along with reasons. We pursue with the Engineer and present The value of claim allowed shall also be stated.