A Contractor intending to make a claim for additional payment must give noticethat he will do so within 28 days of the event.Thereafter he must keep records including any records required by the Engineer,who will be entitled to inspect such records.Within 28 or an agreed number of days of the Contractor's notice, he should senda detailed claim to the Engineer. If the claim has a continuing effect, he shouldsend regular interim claims followed by a final claim once the effects cease.I f t h e C o n t r a c t o r f a i l s t o g i v e n o t i c e , k e e p r e c o r d s o r p r o v i d e d e t a i l s , h i s entitlement will be limited by what can be proved from the records that do exist.The Engineer is obliged to include an Interim Certificate in respect of such claimsor parts of claims for which the Contractor has supplied
sufficient particulars.This clause is an expansion of clause 52 (5) of the 3rd Edition. It is an attempt toregulate the claims procedure. Only time will tell whether an improvement hasbeen achieved in practice. ICE 6th has adopted a very similar procedure.53.1"Notwithstanding any other provision of the Contract...". It is difficult to seehow this clause will relate to clauses with their own internal notice
procedures:c l a u s e 1 2 . 2 ( A d v e r s e p h y s i c a l o b s t r u c t i o n s a n d c o n d i t i o n s ) r e q u i r e s n o t i c e " f o r t h w i t h " ; c l a u s e 2 7 . 1 ( F o s s i l s ) r e q u i r e s t h e E n g i n e e r t o b e a c q u a i n t e d "immediately"; and clause 52.2 (Variations) requires notice within 14 days. It issubmitted that where the notice given makes express the Contractor's intention
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to claim and has been copied to the Employer, then that is sufficient notice and isgiven "within 28 days". No further notice is necessary. If notice is not given, for example within the 14 days required under clause 52.2, it may be arguable thatthis clause overrides, allowing the Contractor to give notice within 28 days or to b e n e f i t u n d e r s u b - c l a u s e 5 3 . 4 . I t s e e m s u n l i k e l y t h a t s u c h a n a r g u m e n t
w i l l s u c c e e d a s t h i s c l a u s e d o e s n o t c r e a t e r i g h t s t o p a y m e n t b u t i m p o s e s a machinery to deal with the rights created by other clauses. If such other clauseprevents the right arising in certain
circumstances, this clause could not, it is submitted, intervene. Accordingly, the "notwithstanding" appears to be addressedt o c l a u s e s s u c h a s t h o s e q u o t e d a b o v e w h i c h s e e m t o g r a n t r i g h t s t o t h e Contractor unequivocally: notice must apparently be given regardless, althoughthe penalty for failure to do so is much reduced by sub-clause 53.4.As the words "claim" and "additional payment" are not defined terms, the preciseapplication of the clause is uncertain. Is it necessary for a Contractor to "claim"in
circumstances where the entitlement is beyond dispute or triggered by, for example, the Engineer's
opinion?" A d d i t i o n a l p a y m e n t p u r s u a n t t o a n y
c l a u s e " : c l a u s e s p u r s u a n t t o w h i c h additional payment may be sought are as follows:-- clause 4.2 Assignment of subcontractors' obligations- clause 6 Drawings- clause 9.1 Contract Agreement-
clause 12.2 Physical obstructions- clause 17.1 Errors in setting out- clause 20.3 Loss or damage due to Employer's risks- clause 22.3 Indemnity-
clause 27.1 Fossils- clause 30.3 Transport damage indemnity-
clause 31.2 Other contractors- clause 36.5 Tests- clause 38.2 Uncovering- clause 40.2 Suspension- clause 42.2 Late possession of the site- clause 49.3 Remedying defects not the responsibility of the Contractor - clause 50.1 Searching for defects- clause 52 Valuation of variations- clause 58 Provisional sums- clause 65 Special risks-
clause 69.4 Termination by Contractor -
clause 70 Fluctuations and legislationM o s t o f t h e a b o v e c l a u s e s s t a t e t h a t t h e E n g i n e e r " s h a l l d e t e r m i n e " t h e Contractor's entitlem ent. Under
clause 40.2 (Engineer's determination followingsuspension), "the Engine er shall...determine...the amount". Similarly, under clause 49.3 (Cost of remedying defects) and clause 50.1 (Contractor to search),if the work has been caused by defects which, in the Engineer's opinion, are not
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the Contractor's responsibility, the Engineer "shall" determine the extra payment.In these instances, the only question is the quantum of the Contractor's costs."... or otherwise...": this appears to be a reference to breach of
contract. Thisinclusion of breach of contract within the workings of the contract is reflected inclause 67 (Settlement of Disputes) where it is made clear that even disputes asto breach of contract must be referred to the Engineer for his decision prior to any arbitration. There is no similar provision in clause 52(5) of the 3rd Edition nor in clause 52(4) of ICE 5th or 6th. It is generally accepted that without words suchas those to be found in clauses 53 and 67 of the 4th Edition, the Engineer wouldhave no jurisdiction in relation
to breaches of contract. Any claims deriving from c o n t r a c t d o c u m e n t s o t h e r t h a n " t h e s e C o n d i t i o n s " o r g e n e r a t e d b y l o c a l l a w s would also be covered by the phrase."...if the Contractor intends to claim...": the force of this clause is mitigated by thisphrase. If the Contractor c an demonstrate that at the relevant time he did not i n t e n d t o c l a i m , p e r h a p s b e c a u s e h e w a s u n a w a r e o f t h e p o t e n t i a l f o r s u c h a claim, then the notice requirement is inapplicable. However, it should be notedt h a t t h e 2 8 - d a y p e r i o d d o e s n o t r u n f r o m t h e d a t e o n w h i c h t h e i n t e n t i o n w a s formed, nor from the date on which the effect first manifested itself, but the dateon which the event giving rise to the claim occurred.An additional
requirement is placed on a Contractor pursuing a claim by clause 60.9 (Cessation of Employer's liability). Under this clause, the Employer's liabilityfor such claims ceases unless the Contractor has included the claim in his
FinalStatement and, if the claim arose prior to substantial completion, in his
Statementat Completion.U n d e r c l a u s e 6 0 . 1 ( M o n t h l y s t a t e m e n t s ) , t h e C o n t r a c t o r i s t o i n c l u d e i n h i s statement "any other sums to which the Contractor may be entitled under the Contract". The form of that statement is to be prescribed by the Engineer who willin evitably require that the grounds for the claim be identified. A Contractor maywell wish to point to his monthly statement by wa y of a notice under this sub -clause. A difficulty in the Contractor's way is that clause 60.1 does not require themonthly statement to be copied to the Employer whereas the Employer must
bes e n t a c o p y u n d e r t h e c u r r e n t s u b - c l a u s e .
A p a r t f r o m t h i s o b j e c t i o n , i t i s submitted that the monthly statement could well suffice. Under the 3rd Edition,regular monthly reports were called for, a system which has certain apparen tadvantages over the present clause. In ICE 6th, notices are called for "as soon as may be reasonable and in any event within 28 days".5 3 . 2 T h e o b l i g a t i o n i m p o s e d u p o n t h e E n g i n e e r t o s t u d y t h e r e c o r d s m a y b e found in practice to be inconvenient to the Contra ctor and Engineer alike. Thisclause may be honoured more in the breach. See comments under 53.5 below.5 3 . 3 T h i s c l a u s e b e a r s s i m i l a r i t i e s w i t h c l a u s e 4 4 . 3
( I n t e r i m d e t e r m i n a t i o n o f extension of time) where delays having a continuing effect cause the Contractor to give regular
interim notices which are intended to result in interim extensions
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o f t i m e b e i n g g r a n t e d . H e r e , t h e r e g u l a r n o t i c e s a r e t o
b e g i v e n a n d t h e r e i s provision, albeit ambiguous, for interim payment under sub-clause 53.5.The requirement to submit "a final account within 28 days of the end of the effectresulting from the event", will often prove difficult to enforce in practice. It is veryoften highly debatable when the effects of any given event come to an
end. For e x a m p l e , t h e e f f e c t s o f a c r i t i c a l d e l a y w i l l , o n o n e v i e w , e n d o n l y u p o n substantial completion as every critical activity subsequent to the delay will havebeen postponed.5 3 . 4 I n c o n t r a s t t o c l a u s e s 4 4 . 2 ( C o n t r a c t o r t o p r o v i d e n o t i f i c a t i o n a n d
d e t a i l e d particulars) and 52.2 (Power of Engineer to fix rates), there is no attempt here tocreate a condition precedent to entitlement. The incentive offered for
complianceis that the Contractor's entitlement would be limited to such amounts as he isable to prove from such contemporary records as he
maintained. The severity
of t h i s c l a u s e w o u l d d e p e n d v e r y m u c h o n t h e E n g i n e e r ' s o r a r b i t r a t o r ' s interpretation of the clause. Arbitrators reading the clause at its narrowest wouldpermit no oral evidence and would require the claim to be "verified", i.e. proved by contemporary records. This
requirement may lead to a far higher standard of proof than the traditional balance of probabilities. Similarly, they could decline
tom a k e a s s u m p t i o n s i n o r d e r t o b r i d g e g a p s i n d o c u m e n t a t i o n . M o r e l i k e l y howe ver, arbitrators will take the same view as they would if this clause did notexist, namely that the Contractor will only recover those sums to which he can prove his
entitlement.5 3 . 5 T h e E n g i n e e r i s o b l i g e d t o c e r t i f y
i n i n t e r i m c e r t i f i c a t e s t h o s e c l a i m s i n respect of which he has sufficient particulars. If clause 53.2 has been followedand the Engineer has indicated what records he requires to be kept, it will be d i f f i c u l t f o r h i m t o p l e a d a n i n s u f f i c i e n c y o f p a r t i c u l a r s . T h e E n g i n e e r i s n o t e n t i t l e d t o h o l d o u t f o r t h e c l a i m t o b e f u l l y p a r t i c u l a r i s e d b e f o r e m a k i n g a n y payment but must make such payment as the particulars justify. In the common situation where liability is agreed but the amount of costs is disputed, this clausewill be invoked in support of an interim payment.Whilst this may have been the intention, the Employer could argue that paymentshould only be made where the Engineer is fully satisfied as to a particular part of the claim. If it is clear that the claim is worth, for example, between $20,000 and$ 3 0 , 0 0 0 b u t a g r e e m e n t h a d n o t b e e n a c h i e v e d o n a n y d i s t i n c t p a r t o f t h e $20,000, the Employer could resist payment. This seems unfortunate and theclause could usefully be clarified. This provision should be compared with theprovision for on -account
payments in clause 52.1 (Valuation of variations) and c l a u s e 5 2 . 2 ( P o w e r o f E n g i n e e r t o f i x r a t e s ) . U n d e r t h o s e c l a u s e s , i t i s m a d e clear that payment is to be made in the absence of agreement or the fixing by theEngineer of a rate or price. This comparis on assists the Employer to argue thatthe draftsman did not intend such on -account payments to be made under the current sub-clause.
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