Civil Engineering Reference
In-Depth Information
Although contractors will often include the cost of preparing the claim within the claim it-
self, the contractor is not usually entitled to reimbursement for any costs it has incurred in
preparing the claim. The reason for that is that under SBC, IC, ICD and DB, the contractor
is not required to prepare a claim in the sense of a fully reasoned document such as might
be used in arbitration proceedings. The contractor is merely required to make a written ap-
plication to the architect, backed up by supporting information. That ought not to amount
to more than an application setting out the circumstances, citing the clause numbers and the
relevant matters involved, and linking the two together. That should be something that any
contractor which has genuinely suffered loss and/or expense could do without too much dif-
ficulty,althoughitwillinvolveproperresearchintotheoccurrencesgivingrisetothelosses.
Therefore, fees paid to so-called claims specialists or to independent quantity surveyors or
other professional advisers are not in principle allowable as a head of claim. In a recent case
the court held that, in principle, a claim for claim preparation could be a valid head of loss
and/or expense. However the court did not give any reasoning for this conclusion and did
not actually allow much compensation.
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If a claim proceeds to arbitration or litigation, the contractor is entitled to claim its costs,
whichwillinclude thecostofgetting theclaim intotherightformforarbitration. Onasum-
mons before a court to review taxation of costs of an arbitration which was settled during
the hearing, the fees of a claims consultant for work carried out in preparing the contract-
or's case for arbitration (essentially, three schedules to the Points of Claim) were allowed as
costs of a potential expert witness in the arbitration.
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The expenditure of managerial time in remedying an actionable wrong done to a trading
companycanproperlyformthesubjectmatterofaclaimfor'specialdamage'inanactionat
of managerial time within the company spent on preparing a claim. Obviously, there could
be no element of double recovery, and such a claim should not be covered by any claim for
head office overheads. It is likely to be quite difficult for a contractor to successfully make
such a claim, and there would be substantial hurdles to cross. The case against recovery
of the costs of employing a claims consultant is that such employment is unnecessary, and
therefore the costs do not amount to money necessarily expended and so recoverable. It is
likely that a contractor trying to recover such costs would be put to proof that the particular
circumstances were such as made the employment of a claims consultant essential.
