What is A Claim in Construction?
In construction industry, claim means that one of the parties is asking for compensation for a problem caused by others such as changes, delays, unproductivity, extra works and unforeseen circumstances.
Are You Entitled to Claim a Time Extension?
We explained this part in our another article. You may want to check it, here.
If a delay has been caused by an event that is the employer’s responsibility, then in general, the contractor will be entitled to an extension of time. – RICS professional guidance, UK, Extensions of time, 1st edition
I Have A Claim, What Should I Do now?
First of all, there are different ways to follow for different type of contracts. We now will tell the general way which is similar for all contracts.
Step 1: Contract Review
Check your contract and review the related clauses. The construction contracts such as JCT and NEC have very detailed clauses to describe what all parties should follow for processing a claim.
Step 2: Notices
Inform your Client about what happened. This is called notice under most of contracts and its an obligation as per contracts.
Step 3: Do not miss deadlines
Contracts have deadlines for the notices. Missing them may lead you to lose your claim rights.
Step 4: Analyse the impact
Now you need to analyse the impact of what happened. This may be a delay caused by others, or may be an extra work caused by others. Very briefly, there are two main impacts you may have. One is time loss, and the other one is money loss.
Step 5: Claim the compensation of the impact
Now its time to ask for a compensation of the impact of what happened. After you analysed the impact, you explain the impact in a letter and also include what you want for the compensation. This may be included in the notice letter, if you are able to analyse the exact impact at that time. But usually this will be another letter, documentation, which follows the notice.
What happens after that?
Once you submitted your claim letter to the employer, they will have a specific time which is described in the contract, to review your request and reply you.
They have some options, like receiving your claim request, rejecting it, asking for further evidence etc. These are again described in contracts.
If My Claim rejected, what is next?
There are different things you can do if your construction claim got rejected. But the first thing we advise is reviewing the rejection reason. The employer’s rejection may be referring to a wrong analyse in your claim, or a missed notice deadline or stating that you are not entitled because you have already problem with something else.
The next step will be depending on the rejection reason. But
Do i need a claim consultant?
If there is a dispute between you and your employer regarding your claim. This may be showing that you need a professional help. As Liongate, we helped many clients to get their claims accepted.
We offer a meeting to all our potential clients to analyse their claim, and it’s status. This is an hour free of charge initial meeting. Then we provide a non-bounding quotation. If client accepts the quotation, we send a claim consultant to review and proceed the claim process from A to Z.
Conclusion
There are many ways to lose money in a construction project, if you are not managing your claims well. If you want to prevent loss, you need to make sure that you know your contract well and you analyse the impacts and claim compensation for that.
If you would like to cover your project contractually against any losses, reach us for our claim consultancy services. Check it out here.
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