Delay Claims – The importance of contemporaneous records by the contractor

It often occurs that contractors know that something went wrong on a project, but because they lack records, are unable to identify the exact causes of the problem or prove that claimed costs are attributable to the problem.

When claiming for delays, the contractor needs to demonstrate the cause and effect of the events he/she claims are the root cause of the delays. Good records and clear factual evidence, help avoid confusion and assist in reaching agreements on delay claims by defining facts, roles and responsibilities.

Whilst first-hand oral evidence in a dispute holds relevance and probative value, when coupled with documentary proof, its probative value increases. Relying only on the backup of oral evidence should a dispute arise, has the further downfall of the availability of witnesses. Often matters are only ripe for hearing many months or sometimes even years after the dispute was raised and often contractors are faced with staff turnover and witnesses are unavailable. There is also the issue that those persons who are best placed to testify in a dispute are often part of the problem. It is these witnesses who may have to be subpoenaed and there is a further risk that they may be hostile.

Therefore, the need to establish clear and well thought out schemes for documenting project information cannot be overemphasised. Although recordkeeping may come at an additional cost, it can be justified, because in the event of a claim it assists the contractor to prove what transpired. Similarly, keeping proper records may assist an Employer to disprove a claim. If a delay claim is not settled, then good recordkeeping also assists the lawyers or experts in preparing an accurate reconstruction of the project history.

The basic records that should be maintained include, inter alia, the following:

• Pre-contract documents which include the RFP/RFQ, tender submissions, correspondence, minutes of clarification meetings and copies of correspondence, etc.
• Contract documents which include the scope of work, drawings, BoQ, Letter of Award, kick-off meeting minutes, construction programme, etc.
• Contemporaneous documents which include notices, claims, correspondences, FEQ registers, delay registers and any other information related to the delay etc.
• Programme information including the basis of the programme, the critical path, the resources schedule, etc.
• Cost data.

Even though the assumption is that the claims originator on a construction project, prior to the matter being a dispute, may be argued to be subjective in the preparation of the claim due to the fact that the company he/she works for stands to lose something if the claim isn’t granted. Good recordkeeping assists the claim originator in bringing some objectivity in preparation of the claim with reliance on solid data. In the event of a dispute, the contractor would have suffered financial hardship and this hardship is exacerbated through the costs of attempting to prove its entitlement. This hardship of proving entitlement can be alleviated through good recordkeeping.

There has been a matter where the arbitrator commented that there are three things that are important when proving a claim: Documents, Documents, and Documents.

Should you require any further assistance or advice on this matter, please do not hesitate to contact the Association.

Bilaal Dawood

Head: Membership Services