Disruption. We all know it happens, repeatedly, and we all know how difficult it is to get a disruption claim accepted. The gold standard test for disruption is the so-called ‘measured mile’ which requires an approved programme, an area of work representative of the general project in which no changes occurred and work proceeded as planned, and great documentation. Where there is wide-spread change on a project it is almost impossible to find an area which is both representative of the works as a whole while showing no changes. So what can a contractor do to lay the foundations for a successful disruption claim? Here are my top ten tips:

1. Read the Contract – Always, always, always know what your contract requires you to do, preferably before you submit your tender price, so you know exactly what is expected of you and there are no nasty surprises once work commences. Once work has commenced re-read the contract so you can recognize delay and disruption when it occurs. For example, most contract forms allow the Engineer and/or the Contractor to issue new and revised IFC Drawings, however this means issue new and/or revised IFC Drawings, not slip instructions in responses to requests for information.
Any instructions issued without an Engineer’s (or Contractor’s) instruction need to be sent back to the Engineer/Contractor requesting an instruction under your contract. This can be easily achieved by a ‘form’ letter changing only the references and description and puts you in a great position with regards to claiming for potential delay and disruption. Not all instructions delay the project completion date, but most revised drawings will disrupt the works to some degree.

2. Review the state of the project records – Good records provide the basis for all claims, whether delay or disruption. Without detailed records your disruption claims will almost certainly struggle to gain acceptance from a cynical audience. Good records start with detailed progress information, preferably submitted to the Employer/Contractor each week or month. This isn’t a time wasting exercise that costs money to produce; think of it as your long term insurance. In times of peril these records will repay handsomely.
Daily site records are another excellent source of information for a disruption claim, even where the Employer’s/Contractor’s staff are counting labour in and out of the site each day. If your records are sketchy at best, or even non-existent, don’t procrastinate, direct someone immediately to be responsible for this vital aspect of your works.

3. Identify the causes – Be imaginative! This doesn’t mean ‘inventing’ causes, it means looking at issues from the so-called ‘Big Picture’ perspective. It may be, for example, that your contract required the main contractor to provide general scaffolding for your works however after the wet trades were complete the contractor moved his scaffolding to a new location before you had finished your works.
Being a proactive subcontractor you provided scaffolding and invoiced the main contractor for the cost of the scaffolding, however, what about the time wasted by labour while scaffolding was erected, or the idle labour waiting for the scaffolding to be moved from one location to another? Your margin is being eroded by increasing idle labour costs!

4. Identity the effects – Be realistic! No employer will accept an argument that 100% of your unrecovered manhours were due to disruption caused by a decision or instruction, however, if your records show that the majority of your labour was unable to work for a period as a result of a decision or instruction (for example, think of a late change to the size of fans; HVAC labour will be affected, but plumbing labour will not), then the task of convincing the employer/main contractor/developer to pay for idle labour becomes easier.

5. Establish the causal nexus – these clever words mean establishing the link between the cause and the probable effect of an event. Some effects are easy to spot and establish as a delay, for example, a new drawing is instructed by the engineer that changes the size of the air circuit breakers (the ‘cause’) on an electrical distribution board after the board has been commissioned. Delay is caused to the board, everything connected to the board and potentially a wider delay to the project depending on the critical path. What about the disruption caused to commissioning other downstream systems that was overcome by increasing resources, working longer hours (the ‘effect’)?

6. Choose the right analysis method – there’s a few to choose from and each has its own strengths and weaknesses. The trusted ‘measured mile’ is the gold standard in terms of proof of disruption but brings challenges in terms of establishing an area which has not been affected by disruption, proceeded as planned without delay and is representative of all aspects of the project for which a claim for disruption is being made. Other methods of demonstrating disruption include earned value, baseline productivity analysis, etc.. Each method has its own strengths and weaknesses but all rely on good records…review item 2 above!

7. Provide the evidence – there are many places to look for the evidence you need to demonstrate disruption such as daily site records, progress reports, payment applications, similar projects carried out in similar circumstances by the same construction crews, industry standards and the like. If all else fails, gather witness statements…

8. Prove your Tender estimates were correct. Easier said than done, but you need to prove that your original resourcing was sufficient. This comes back to the old question of records; good records from similar, previously completed projects provides excellent documentary evidence that your tender estimates were adequate.

9. Remember that the Law is on your side. Traditional wisdom says that global disruption claims always fail, however learned legal minds may beg to differ. In Middle East jurisdictions if the Employer/Contractor breaches their contractual obligations then courts are often inclined to accept that this will naturally result in the other party incurring a loss – thus the determination of the quantum of that ‘loss’ is often far less forensic and the courts less likely to be perturbed by whether the claimed ‘loss’ was ‘global’ or otherwise. In the US global claims have been accepted, albeit reluctantly, for several decades.
In England there appears to be recent movement towards accepting global claims in some circumstances. In the Middle East there is open debate about the acceptance of global claims and it is mooted that courts in the region have a far broader interpretation of what constitutes ‘loss’ or ‘expense’ than their counterparts in Europe or North America. Whichever the jurisdiction, the rule of thumb is particularise wherever possible; where not, demonstrate why this is not possible.

10. Be prepared for lengthy negotiations – management expectations need to be managed! A well planned, drafted and supported disruption claim is only the beginning and your management need to be made aware of this point. Educate your management on the strengths and weaknesses of your claim so that informed decisions can be taken. The claim provides the basis and the catalyst for discussions.
Present your claim to your client with a friendly invitation to sit and discuss the same once they have had time (but not too much!!) to read and digest the contents, then schedule a series of meetings between decision makers on both sides.

This article was originally written and published on the internet by DBS Consult on 06/02/18.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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If you could benefit from this please call Jon now on 07795 231 231 or email: Jon@BDASweb.com