Progressing the claim

Report

When a report on the claim is issued, it should contain notes on the following, as appropriate:

• general comments and background information;
• contractual provisions under which the claim arises;
• concurrent events on the site that might have a bearing on the claim (for example, observations on the contractor's performance on site; the quality and efficiency of the site organisation; difficulties with sub-contractors; shortages of labour, plant or materials; a reluctance to comply with instructions; or faulty workmanship);
• comments on each item of claim with regard to its validity or any prima facie errors it may contain;
• factual information and records used for personnel and items of plant, and a record of how the time of each on site activity was affected by the delay;
• payment or part-payment already made and the extent of agreements reached;
• in the case of disputed items, the reasons why it has not been possible to reach agreement with the contractor; and
• evaluation and recommendation.

The following may usefully be attached as appendices:

• abstract of the flow of information or instructions;
• abstract of the events on site; and
• abstracts of records, diary entries and similar.

Payment of monies

Where it is apparent that monies are due, some payment should be made even if the total has not been fully calculated. In any event, an early response, without prejudice, should be issued to the contractor, setting out any prima facie errors and noting any additional information required.

It is important that every effort is made to pay such losses or costs as have been ascertained or determined as soon as possible after they have been incurred. This particularly applies to large claims with high interest rates. Having ascertained or determined the loss, the claim assessor should include an appropriate amount in the next valuation. The amount paid should be reviewed as and when significant new information is received, and when the claim assessor is satisfied that further payments are justified. The proper, timely and professional consideration of claims reduces the risk of a major dispute arising.

Values should be reduced in subsequent valuations where they are shown to have been previously assessed at too high a level. Any delays in reducing amounts included in valuations will only exacerbate the problem. However, valuation reductions are always difficult and should be avoided wherever possible. The contractor has a legitimate interest in the certainty of amounts included in the interim valuations, as it will probably use the figures in the valuations as a basis for payment of subcontractors and suppliers.

Where a contractor is late in supplying information, appropriate deductions from finance charges should be made.