There are a number of claims that will be made under a contract, yet perhaps the one that is most often needed is an Extension of Time (EoT) to complete the works that have been contracted.
Amazingly despite these types of claims often being relatively straight forward they often fail because the party making the claim fails to adequately demonstrate their entitlement in the submission.
When drafting an EoT there are 8 key elements that need to be included, these being:
• The claim event
• Liability for the claim event
• Contractual compliance
• Contractual entitlement
• Statement of claim
• Cause & Effect
• Delay analysis
We will now examine each of these main headings in a little detail
The claim event
This is exactly what the title says it is, state the event that has lead to the claim e.g. weather event and then provide the circumstances that lead to the event. This element should be short and concise and acts as an effective Executive Summary of what is to follow, where you detail the claim in greater detail.
Liability for the claim event
In outlining “The claim event” you are setting out what has caused the claim to be formulated and submitted. In this section you need to demonstrate liability lies with another or the other party to the contract and you want to determine liability for the event.
If the claim is by a Sub Contractor to a Main Contractor the possibility exists that the Main Contractor will have a similar right under the Main Contract with the Employer, particularly around weather events or force majeure. These types of events will usually entitle the party bringing the claim to an EoT, but this will obviously be dependent on the specific form of contract and its provisions.
In the Joint Contract Tribunal (JCT) Minor Works Contract grounds for an EoT are dealt with at Clause 2.7. In other forms such as the New Engineering Contract (NEC) often the claim will be dealt with as a Compensation Event.
Generally the Contractor or Sub Contractor will be required under the terms of the contract to submit notice(s) with detailed particulars, particularly in relation to an EoT. Where the time frame is silent in the contract then it will be within a reasonable time period.
Of course what is reasonable?
This is why it is better to define periods during the contract negotiation for the protection of all parties.
By way of an example in the International Federation of Consulting Engineers (FIDIC) form of contract at Clause 44.2 states:
44.2 Provided the engineer is not bound to make any determination unless the contractor has
(a) Within 28 days after such an event has arisen, notified the engineer with a copy to the employer and
(b) Within 28 days, or such reasonable time as may be agreed by the engineer after such notification submitted to the engineer detailed particulars of any extension of time to which he may consider himself entitled in order that such submission may be investigated at the time.
It may be the case that the submission of these notices is expressed as Condition Precedent and in the event the Contractor or Sub Contractor fails to comply with condition may result in the wavering of any entitlement.
It is therefore essential for the parties to understand their obligations and expressed provisions of the contract and as a consequence to comply with the provisions. A contract is an even handed document (or at least should be) and all parties should endeavour to comply with all provisions therein, particularly if they want to rely on provisions to establish entitlement.
As a general rule the contract (particularly where a standard form) will contain specific provisions which may entitle the Contractor or Sub Contractor to an EoT for one or a series of events.
By way of an example under FIDIC, there are a number of different conditions:
Clause 6.4 – Late Drawings
Clause 12.2 – Adverse physical obstructions or conditions
Clause 27.1 – Discovery of fossils or antiquities
Clause 36.5 – Additional tests not provided for
Clause 40.2 – Suspension of the works
Clause 42.2 – Failure to give possession of site
Clause 44.1 (a) – Additional or extra work
Clause 44.1 (c) – Exceptionally adverse climatic conditions
Clause 44.1 (d) – any delay, impediment or prevention by the Employer
Clause 44.1 (e) – any special circumstances, other than through default by the Contractor
Clause 69.4 – Contractor’s suspension of the works
Statement of claim
As the claim is effectively in two parts, first you demonstrate entitlement (as demonstrated in “Liability for the claim event”, “Contractual compliance” and “Contractual entitlement”) and then the details of what has transpired to lead to the claim. Therefore it makes sense to again make a clear and succinct statement on what the Contractor or Sub Contractor is claiming.
This is where the claim will succeed or fail effectively as its one thing to prove a contractual entitlement it’s another to prove that you have that entitlement based on what has occurred.
This section needs to be robust and will have all the evidences that the Contractor or Sub Contractor seeks to rely upon as the documentary evidence. This documentary evidence will be made up of a number of different contract and non contract documents, which all drawn together in a single document support the assertions made in the overall claim document. These can include, but be limited to the following:
• Site Instructions
• Method Statements
• Risk Assessments
• Progress Reports
• Record Photographs
• Minutes of Meetings
• Programme’s (Baseline and updated)
• Statements of Fact
• Expert Witness Statements
Cause & Effect
Being read and drafted together with the “Substantiation” will be the “Cause & Effect” which as the title suggests is where you demonstrate a cause; e.g. adverse weather for a prolonged period outside of the normal for that period; with the effect; which would in all likelihood be delay to works on site at the minimum and may result in works that are damaged and require to be re-done.
In order to be successful in a claim merely listing the events in chronological order should not be sufficient to demonstrate a full entitlement. The real art in putting together the claim is for the narrative to tell the person assessing the claim a story describing how the event has affected the works.
This should commence with what the planned works were and how they were affected, in particular making reference to planned sequences, durations and mythologies (Note how the list in the previous section becomes important here, the status of the works to the planned at the time of the claim event and detailing the changes that took place as a direct result of the claim event.
Undertake a delay analysis which demonstrates the effect to the programme.
There are a number of internationally recognised delay analysis methods and the most appropriate method will effectively be determined by circumstances surrounding the claim event. This can include but not be limited to the following:
• Level and detail of records available
• The robustness of the Baseline Programme and effects of any periodic updates
• Available time (Particularly around contracts that time bar events after the passing of a period of time)
• Degree of accuracy
• Level of proof required under the contract.
We will review Delay Analysis Methods in greater detail later.
Of course every claim will be different and some may need very basic details under the defined headings detailed above, but likewise others can be extremely complex and may be to demonstrate more than one entitlement. Like any document it should be clear and concise to enable the person that has to make a Determination being able to do so based on the submission. If the claim submission is haphazard and difficult to follow, it could lead to the claim being rejected even though there was an entitlement.