Driver Trett Digest Issue 26 - Flipbook - Page 9
DIGEST | ISSUE 26
Disruption can be for critical, or more often, noncritical events. Therefore, winning an extension of
time claim may not result in the recovery of losses
associated with the disruption on site. However, the
disruption rather than critical delay has often caused
much of the losses suffered.
COMPLY WITH CONTRACT NOTIFICATION
Complying with contract notification may be stating the
obvious but giving ‘notice’ is the prerequisite to bringing
any claim.3 Failure to comply with your contract notice
provisions within stipulated timescales can be fatal and
can result in the failure of the disruption claim in its
entirety.4
DISRUPTION CLAIMS - HOW TO SUCCEED
For a disruption claim to be successful, the three
elements of the ‘common sense‘ approach need to be
proven:5
1.
2.
3.
Events occurred which entitle the claiming party to
loss and expense;
That those events caused disruption to activities;
That the disrupted activities caused loss and/or
expense to be incurred.
ESTABLISHING THE EVENT AND CAUSATION
Disruption claims are arguably harder to detect,
prove and measure than other financial claims. Loss
of productivity is often not identified until after it has
occurred, and determining which work element(s) and
trade(s) are suffering losses due to disruption depends
on the quality of records to explain why those losses
have occurred. By interviewing relevant personnel on
site, the contractor often identifies the type of events
that have occurred and the prospect of a successful
claim. However, to satisfy cause and effect, it is
necessary to analyse factual, contemporaneous project
records such as project correspondence, progress
records, site diaries, allocation of timesheets and
meeting minutes. The better the records, the greater
chance of being successful. It is no secret that a lack of
records and reporting is unhelpful.6
3. Disrupted? Prove It! (Fenwick Elliott, Insight Issue, May
2017).
4. Van Oord and another v Allseas UK Ltd [2015] EWHC
2074 (TCC).
5. Walter Lilly & Company Limited v (1) Giles Patrick Cyril
Mackay (2) DMW Developments Limited [2012] EWHC 1773
(TCC).
6. Van Oord and another v Allseas UK Ltd [2015] EWHC
2074 (TCC).
The better the records, the greater the chance is of
being successful, and contractors should always take
account of the quote of Max Abrahamson in his book,
'Engineering Law and the ICE Contract':
“A party to a dispute, particularly if there is an
arbitration, will learn three lessons (often too late):
the importance of records, the importance of records
and the importance of records.”
MEASURING DISRUPTION
Once the events in question have been identified as
causing disruption, and a loss of productivity, the next
step is to value the disruption.
The SCL protocol provides two categories: productivitybased methods, and cost-based methods.
Productivity-based
methods
1. Project specific studies
a. Measured mile analysis
b. Earned value analysis
c. Programme analysis
d. Work or trade sampling
e. System dynamics
modelling
2. Project comparison
studies
3. Industry studies
Cost-based methods
1. Estimated v incurred
labour
2. Estimated v used cost
This introductory article will only cover the preferred
productivity-based method, the “measured mile
analysis."7 This method works best on linear projects
such as roads, rail and/or where there is repetitive
work, such as cable laying.
A measured mile analysis looks at work productivity
levels during the non-disrupted performance period,
establishing the ‘baseline’ productivity ratio. Then, the
baseline productivity ratio is compared against the
claim-impacted performance period. The difference
between the impacted and unimpacted ratio is the lost
productivity. However, this assumes that the contractor
can find an undisrupted period to use as a comparison
or can prove it could achieve the productivity rates in
the tender based on contemporary project records.
What not to do is advance a disruption claim on a ‘total
cost basis’. Measuring loss by comparing resources
planned with resources consumed, making no effort to
prove causation, or to take into account other factors, is
unlikely to succeed.
7. SCL Delay and Disruption Protocol 2nd Edition: February
2017.
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