Dealing with claims in construction is a skill which every Quantity Surveyor needs to have in their arsenal. In fact, in a recent RICS journal, it was stated that the number of claims arising on projects is increasing. Therefore, in this article, we’re going to give you some tips on how to deflate inflated claims as a Quantity Surveyor.
Quick disclaimer: This article is for educational purposes only and does not replace professional advice. For specific guidance, consult a qualified professional. Practices may vary by region and project.
Firstly, let’s define what a claim is. The appropriate definition can vary depending on context. However, put simply, a claim is a demand or request for something considered due. In terms of construction, this could be for extension of time, price acceleration, differing site conditions or scope changes to name a few. Some contracts avoid the term “claim” altogether – using their own definitions in an attempt to foster a more collaborative approach to risk & change.
In construction projects, there are indeed instances where submitting a claim is warranted due to valid grounds. However, sometimes these are inflated, either to boost profit margins, or recoup unrelated losses. Successfully identifying these inflations, accurately assessing their true value, and articulating an effective counter-response are key skills for a successful Quantity Surveyor.
Let’s assume you’ve assessed the validity of a claim and agree with the contractor or subcontractor that a claim is warranted. However, you now need to ensure the value and/or additional time claimed is valued correctly. Here are six tips you can use to both assess the claim & evidence your assessment.
Tip 1: Scrutinise the Documentation Thoroughly
Before making any decisions, meticulously review all documentation related to the claim. This includes the contract, any amendments, correspondence, construction diaries, construction programme and other project records. A detailed examination can help you understand the nuances of the claim and identify any discrepancies or unsupported assertions. If the claim is related to an event, work with the project manager to understand the affect on the critical path. Sometimes additional work can, and is, absorbed in the float of non-critical activities. Even if this hasn’t happened, a question which should arise is, could it have been done? To assist with this, we recommend reading the Society of Construction Law (or SCL) Delay and Disruption Protocol, which details delay analysis techniques.
Tip 2: Employ Benchmarking and Cost Analysis
Use industry benchmarks and detailed cost analysis to evaluate the financial aspects of the claim. Compare the claimed amounts with similar projects or tasks, considering factors such as material costs, labour rates, and productivity norms. This helps ensure that the claim is in line with industry standards and realistic cost expectations. Resources like the BCIS (Building Cost Information Service) provide valuable data for such analysis.
Tip 3: Stay up-to-date with industry trends
Stay updated on industry trends by engaging with professional networks and pursuing continuous education. Join organizations like RICS or CICES for access to webinars, conferences, and workshops. Subscribe to industry journals and participate in online forums to exchange insights. Continuous learning through relevant courses or certifications also keeps your skills sharp and adaptive to changes. Why not subscribe to the Metroun newsletter? We provide a curated selection of the most impactful UK construction news stories each month.
Tip 4: Engage in Open Dialogue with the contractor or subcontractor
Maintain open and constructive communication with the contractor or subcontractor who has submitted the claim. Discuss the claim’s details, seeking clarification and additional evidence where necessary. This collaborative approach can often lead to a mutual understanding and more equitable resolution of claims.
Tip 5: Seek Expert Advice When Necessary
Don’t hesitate to consult with legal experts or claim specialists if the claim involves complex legal issues or substantial financial implications. Their expertise can provide valuable insights into the claim’s validity, potential risks, and strategies for negotiation or resolution.
Tip 6: Document Your Assessment and Decision-Making Process
Finally, ensure that you document your assessment process, the rationale behind your decisions, and any agreements reached with the contractor or subcontractor. This documentation will be crucial if the claim escalates to formal dispute resolution mechanisms. It serves as a transparent record of your efforts to assess and resolve the claim fairly.
In summary, managing and deflating inflated claims requires a meticulous, informed, and collaborative approach. By applying these tips, Quantity Surveyors can effectively navigate the complexities of construction claims, contributing to the fair and efficient resolution of disputes and the successful delivery of projects.
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