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Preparing yourself for a claim

Records, Records, Records!


Victoria Price
Contracts Department

This seminar

How to advance a claim for the recovery of additional


costs, unpaid fees and extension of time claims

What is required to prove a claim

Obligations on Mott MacDonald project teams

Introduction

Proof:
act or process of showing that a statement is true; that which
shows a statement to be true.

Not a term found in most contracts, contrast with:


valued by the Quantity Surveyor
estimates to be fair and reasonable
shallascertain

BUT - If the contract doesnt work, proof takes on a new


significance

formality of proof

Introduction

time
CONTRACT
ADMINISTRATION

FORMAL DISPUTE
RESOLUTION

Introduction

Max Abrahamson in his book Engineering Law and the


I.C.E. Contract wrote:
A party to a dispute, particularly if there is arbitration, will learn
three lessons (often too late): the importance of records, the
importance of records and the importance of records.

Group Directive - Contract

Group Directive 4.04 - Terms of Engagement:


agree a written contract before starting work
if impracticable to agree written terms then key matters must be
included:

scope of services, fee, limit of liability, law and dispute


resolution

Mott MacDonald standard terms and conditions

Agree a contract first, start work later

Is there a contract?

What should be included in the contract?


details of the parties
defined scope of work
time of performance
identify expectations and client responsibilities
price of the contract
limit of liability
dispute resolution / arbitration clause

Variations
Normally clear rules in the contract
Mott MacDonald single page standard contract variation
provision:
If the Consultant performs any additional services or if the
Services are delayed or disrupted for reasons beyond the
reasonable control of the Consultant then the Consultant
shall be entitled to such additional fees and additional time
for performance as is fair and reasonable in all the
circumstances. (my underlining)

Variations
Need to establish:
original obligation
instructed change to that obligation
quantities
rates / effects on rates
costs

Variations obstacles to proving entitlement


Are variations permitted?
Absence of a written instruction
implied promise to pay for the varied work?
condition precedent to payment?
consider waiver

Time barring provisions


Change in the employers requirements or design
development? Spec creep in design and build contracts
what was the clients original requirements?

Extensions of time
Mott MacDonald single page standard contract extension
of time provision:
If the Consultant performs any additional services or if the
Services are delayed or disrupted for reasons beyond the
reasonable control of the Consultant then the Consultant
shall be entitled to such additional fees and additional time
for performance as is fair and reasonable in all the
circumstances. (my underlining)

Extensions of time
Need to demonstrate:
existence of a compensation event (NEC) or delay or disruption
compliance with any particular rules
effect / delay
deal with accusations of culpability / concurrency

Extensions of time
What the consultant needs:
programmes (intentions)
progress (facts / records)
explanation
analysis
cause and effect

Poor records examples


Example 1
all terms of a contract were agreed except a liability limit and collateral
warranties
judge held there was no contract
best practice: conclude all the terms in a contract before starting work

Example 2
project only had 3 job codes
parties couldnt identify between costs of varied work and scope of services
best practice: create sub job codes to record time spent on varied services

Poor records examples


Example 3
no formal written instructions for the varied services
variation procedure not followed
unjust withholding of fees
unpaid and additional fees claim
best practice: follow the variation procedure and only proceed with a
variation once the client has given written confirmation of the
variation and any additional fees

Group Directive - Records


Group Directive 4.23 Project Records:
a copy of all documents related to the contract must be deposited
with the business unit's management once the contract is signed
all aspects of the project must be properly recorded
records should be accessible to appropriate staff
at the end of the project records must be properly archived

Summary
Agree a contract
Know the rules
Lay the ground work
Keep the records (investment)
Recognise the different forums

Examples of records
Records which can be kept in relation to procedural
requirements under a contract:
contract programme
variation orders and site instructions
copy of the agreed contract
a full set of correspondence
instructions and orders given (written
and oral)
minutes of meetings
sub-consultant information (including
correspondence and accounts)

requests for information (RFIs) and


responses thereto
drawings (including all amendments)
site diaries
records of key telephone conversations
labour cost information (including copy
invoices)
all other accounts information
delay information

Examples of records
Records which may assist in supporting a claim:
contract programme
timesheets / invoices
copy of the agreed contract
progress photographs with dates when taken
minutes of meetings
delays encountered
site diaries
records of key telephone conversations

Questions?

If in doubt ask a specialist for assistance

Contracts Department
0208 774 3107