Loss and/or expense under JCT standard form contracts - Building Contract Claims - page 265

Provisional sums
3.7 The Architect shall issue instructions as to the expenditure of any provisional
sums and such instructions shall be valued or the price agreed in accordance
with clause 3.6 hereof.
12.4.2 Main points
The JCT Agreement for Minor Building Works 1998 (MW 98) does not
contain the equivalent of clause 26 of JCT 98 or clauses 4.11 and 4.12 of
IFC 98. There is no clause which entitles the contractor to apply to the
architect for recovery of loss and/or expense. The reason may be because
the simple work content, low value and short contract periods for which the
form is intended are unlikely to result in major loss and/or expense claims.
That may be the theory, but in practice MW 98 generates claims as fre-
quently if not to the same extent as more complex forms. MW 98 is a very
popular form of contract; no doubt due in part at least to its brevity
compared with other forms. It is essential, however, that the form should
be used as intended. It is not unknown for MW 98 to be employed for
projects with contract sums far in excess of the recommended limit 565 .In
such cases, the likelihood of substantial claims is greatly increased.
Although the contract does not allow the contractor to instigate a claim for
loss and/or expense, it states in clause 3.6 that the architect must include, in
the valuation of an instruction regarding an omission, addition or other
change in the works, the amount of direct loss and/or expense incurred by
the contractor provided that the regular progress of the works has been
affected. It cannot be emphasised too much that the loss and/or expense
must result from the issue of what might normally be termed a variation
instruction or from compliance or non-compliance with the clause requiring
the employer's compliance with the CDM Regulations. Instructions about
other things do not fall to be valued under this clause. The clause makes no
specific reference to 'ascertainment', but the reference to 'incurred' clearly
means that it is the actual amount and not some theoretical or formulaic
figure which is intended.
The practice of some architects who include the contractor's preliminary
costs in certificates following an extension of time, is wrong. The contractor
is not entitled under the contract to recover these costs and an architect who
certifies them may be negligent. There is no provision for the architect to
request information nor is there a stipulation that the contractor must
provide it. It is clearly in the contractor's interests to provide whatever
information the architect needs. From time to time, it has been stated that,
other than the very limited recovery allowed by clause 3.6, the contractor
cannot recover any loss and/or expense he incurs due to matters such as
failure by the architect to provide information or give instructions at the
565 See Deciding on the Appropriate Form of JCT Main Contract , JCT Practice Note 5, Series 2 (2001) RIBA
Publications.