A-B I I C-E A-D PROGRAMME A-B I I a- C TO COMPLETION C-E PROGRESS D-E EVENT 21-22 DURATION NON-CRITICAL ACTNITIES
Monitoring Delay and Disruption Claims 85 the employer's staff, all notices should be clearly set out, the contractual provisions under which the notice is being given, together with sufficient information to enable the recipient to be aware of the actual, or likely, effects of the matters in respect of which the notice is being given. In the unfortunate (and sadly, too frequent) cases where notice of any kind, no matter how well justified, produces a hostile reaction and continuous allegations aimed at 'muddying the waters', there may be some justification in couching the terms of any notice so that it is almost disguised. If this approach must be adopted, the significance of the notice must be capable of being understood in the light of other and the surrounding circumstances.
Having given notice, the contractor should keep contemporary records in order to illustrate the effects of the events, or circumstances, for which notice has been given. The recipient (the architect, or engineer) should also keep contemporary records. It is good practice to agree what records should be kept, to jointly monitor events and to agree facts during the progress of the works. Many contracts now contain express provisions for keeping records. Failure to agree facts is often caused by attempting, at the same time, to establish liability and entitlement. If both parties address their minds solely to agreeing facts as facts, leaving liability and entitlement for another day, agreement may be more readily achieved.
The most common records which ought to be kept are:
Programme and all updates with reasons for each update (preferably showing delays to each activity);
a adverse weather conditions, including high winds and abnormal temperatures;
Progress Schedule indicating actual progress compared with each revision of the programme;
a Schedule of Resources to comply with the original and each revision of the programme;
records of actual resources used based on progress;
cash flow forecast based on the original and each revision of the programme;
records of actual cash flow;
schedule of anticipated plant output;
a records of actual plant output on key activities;
a records of plant standing and/or uneconomically employed (with reasons);
schedule of anticipated productivity for various activities; records of actual productivity on key activities;
schedule of anticipated overtime (and the costs thereof) in order to comply with the original and each revision of the programme;
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records of actual overtime worked and the costs thereof;
progress photographs and (where appropriate) photographs of work to be covered up;
where appropriate, video records showing sequence and method of working;
drawing register with dates of each revision and notes of amendments; site diaries and diaries of key staff;
minutes of meetings and notes kept at meetings;
cost and value of work executed each month (for the project);
cost and value of work executed each month for all projects (company turnover);
allowance for overheads and profit in the tender sum;
cost of head office overheads each month (quarterly or yearly if not pos- sible on a monthly basis);
profit (or loss) made by the company for each accounting period. Many contractors do not have the management information systems or pro- cedures to keep all of these records. However, many of them are capable of being kept on site with the minimum of extra effort. It is important to specify what records should be kept by different members of staff. For example, the contents of the diary, and records kept by the project manager will be different from those kept by a section foreman. Company policy should lay down procedures and guidelines so that there is the minimum of duplication (save where it is essential for verification) and that there are no gaps in the information to be collected.
The effect of failure to give notices and particulars varies from contract to contract. JCT, ICE and FIDIC contracts up to and including the fourth edition of FIDIC, for example, did not provide for notices and/or particulars to be a condition precedent to the contractor's rights to a claim for extensions of time or additional costs. However, the FIDIC Red, Yellow and Silver Books have changed all that. These new contracts require written notice of all claims (for time and money) within twenty-eight days (clause This provision is a condition precedent and the contractor will therefore lose his rights to such claims if he fails to give notice in accor- dance with this clause (see supra). The FIDIC Green Book makes provision of an early warning a prerequisite to an extension of time or addi- tional costs (clause with the proviso that some relief may be given having regard to any reasonable steps that the engineer may have taken to reduce the effects if an early warning had been given.
Such provisions, which effectively 'time-bar' claims if the contractual machinery is not followed, are extremely onerous. It may be easy to comply with a provision to give notice within twenty-eight days in some circum- stances, but not in others. The demand on management resources to
Monitoring Delay and Disruption Claims 87 potential claim events in order to comply with the contract is likely to increase costs. Many notices will be for minor events which may not sub- sequently affect the works. Paperwork will increase unnecessarily and the resources required to deal with these notices and respond to them will also be increased.
It should be noted that in some civil law jurisdictions, contracts may not be permitted to oust a party's legal rights to a remedy or compensation by the incorporation of 'time-bar' provisions. In such jurisdictions, contractors may be able to claim even if there has been failure to give notice within a specified period. However, it is advisable to follow the contract whenever possible to avoid the potential high cost of finding out if a late notice is good enough. Where time-barring of claims is outlawed, it should not be seen as an excuse to leave all notifications to the last minute.
a contract used extensively on major projects, contains onerous provisions. Whilst sub-clause (extensions of time) contains requirements to give notice 'as soon as reasonably practicable' (not a con- dition precedent), sub-clause (notification of claims) requires notice to be given within twenty-eight days, failing which the claim will not be allowed (a condition precedent).
The requirements to keep particulars and submit accounts of claims in the ICE and FIDIC contracts (including the FIDIC Red, Yellow and Silver Books) are subject to the proviso that the does not lose his rights to any claims if he fails to comply, however his entitlement may be severely prejudiced by such failure (clause 53 of ICE and fourth edition of FIDIC and clause of FIDIC contracts).
On the employer's side of the fence, the architect, engineer, clerk of works and other staff should know what records they should each keep.
If they are not kept jointly with the contractor, they should be agreed wherever possible. Keeping records for the purposes of defeating a claim in an arbitration may appear to be good practice, but it is more sensible to use them to settle contentious issues at the time so as to avoid costly disputes. In addition, if the contractor is aware that his grounds for a claim are doubtful (having regard to better records kept by the employer's professional team), it is more likely that the claim will be dropped and he will make an effort to get on with the job and possibly make up some lost time.
The employer's professional team should keep additional records to monitor delays by the contractor and delays for which no additional payment is payable.
Whatever records are kept, they are likely to be invaluable in the prepa- ration of particulars in support of a claim. It should be remembered that particulars should, in addition to supporting the claim, be persuasive. It is all very well merely submitting all relevant records as particulars without
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some argument and illustration to set out the contractor's case and the enti- tlement sought, on the basis that it is the architect, or engineer, who is responsible for assessing the claim; but, once the architect, or engineer, has made their assessment, it is sometimes difficult to persuade them to change their minds. Their assessment may be insufficient because they did not appreciate the effects of some delays on the method, sequence or timing of an operation, or because they did not recognise the significance of some of the records submitted. Naturally, they may be reluctant to admit this fact, particularly if it will bring to light their inexperience, or emphasise that the delay was due to their own incompetence. Good particulars should, in addi- tion to providing supporting records, illustrate the effects of the events, or circumstances giving rise to the claim. To this end, the contractor is well advised to provide details and diagrams indicating:
what ought to have occurred if there had been no delaying event, or circumstance;
what actually occurred as a result of the delaying event, or circumstance; analysis of facts, calculations, explanations and arguments to show how the delaying event, or circumstance, was responsible for the change in the method and/or programme.
4.10 Delays after the Contract Completion Date
The best advice that can be given to any employer is not to cause any delay after the contractual completion date (extended, if applicable) has passed and when the contractor is in culpable delay. Very few contracts deal with delays by the employer after the completion date, and in many cases, once such a delay has occurred, the time for completion is no longer applicable and the contractor is allowed a reasonable time for completion of the works. Even where the contract does provide machinery for extending the date for completion in the event of such delays, there are few guidelines as to how the extension should be dealt with, and the effects on the employer's rights to liquidated damages. The Singapore Architects Standard Form of Con- tract contains very detailed provisions in clause 24 (see Figure 4.2). In this form of contract, it is intended that the employer may recover liquidated damages during a period of culpable delay by the contractor (even if a con- current qualifying delay should occur during the period of culpable delay). Only if the contractor is not himself in delay is it intended that the employer's rights to recover liquidated damages be suspended during a further delay caused by a event or circumstance. However, with the greatest respect to the distinguished author of these provisions, they are unduly complicated, and they are likely to fail to protect the employer's