DELAY AND DISRUPTION CLAIMS AND THE NEW GCCC CONTRACTS (January 2007) INTRODUCTION It is anticipated that contractors

will be required to take a greater degree of risk in relation to specified delay events. In addition a much stricter approach will be introduced to deal with disputes and notification provisions. The most marked departure from existing contracts is the proposed introduction of time bars for the making of contractor claims. Where a contractor fails to notify a claim within a stated period of the occurrence of the event giving rise to the claim, the entitlement to claim is lost. Such notification must include a prominent statement that the notice is issued pursuant to the relevant contract clause of the GCCC contract. These time bars, if not complied with, will prevent recovery of otherwise legitimate claims and claimants will have to be extremely diligent in managing their contracts and records to avoid this occurring. Whilst the GCCC contracts are limited to public contracts it is inevitable that employers in the private sector will seek to introduce provisions from the GCCC contracts in their private commercial agreements. On the basis that the majority of disputes on construction contracts relate to delay and disruption claims it is extremely likely that these time bar provisions will become standard not only in public sector construction contracts but also in private sector contracts. If this does occur then the importance of record keeping and timely notification of claims will become critical to contractors. WHAT SHOULD CONTRACTORS DO? The overriding objective of any contractor is to ensure that the contract successfully concludes without dispute and that both the contractor and employer walk away from the contract as amicably as they entered into it in the first place. Successful contracts, from the contractor viewpoint, are those where claims for delay and disruption, variations and other additional costs arising during the course of the contract, are dealt with fairly by the employers certifier. Where the contractor has maintained meticulous records and procedures during the course of the contract and can produce to the certifier evidence to prove his claim in respect of delay and disruption, either within the time period specified in the new GCCC Forms of contract or otherwise, the fairer the certifier is likely to be in assessing the contractors claim. The maintenance of accurate records also means that the causal link between delay and disruption and the event that triggered it can be established and the resultant loss and expense more readily quantified, thus enabling the contractor to discharge the burden of proof and succeed in its claim. Where the contractor cannot produce documentary evidence to prove his claim, he risks having his claim reduced or, even worse, dismissed completely. To succeed in his claim the contractor must present facts supported by sound documentary evidence; the sort of evidence that speaks for itself and discharges the burden of proof without any doubt. Achieving these high standards of evidence requires establishing and maintaining structured contract procedures, meticulous record keeping and serving contractual notices and necessary correspondence on time and when required. RECORD KEEPING The GCCC contracts impose strict requirements that contractors prepare and maintain suitable information and contemporary records to support their claims. Contractors that do so will not only be prepared when claims arise but may avoid claims arising in the first instance.

Records and information which will be crucial in the success of claims include: a master programme identifying the critical path and indicating how the Contractor had envisaged the sequence and timing of activities based on tender information a progress schedule of activities against the master programme an estimate of weekly resources and anticipated expenditure to comply with the master programme records of actual resources and expenditure based on progress records of plant standing or uneconomically employed labour allocation sheets and associated costs progress photographs drawing register site diaries minutes of site meetings schedules of information requested and information actually received written confirmations of instruction (eg dates, from whom, to whom, about what) daywork sheets variation register

Many delay and disruption disputes could be avoided if the parties properly monitored and recorded the above-mentioned information. Those of us who advise on disputes often find that there is a lack of records resulting in uncertainty as to when delay occurred, who caused the delay and the effects of that delay. Good record keeping can remove this uncertainty. CONCLUSION The imposition of stricter regimes under the GCCC contracts as regards notification of claims and time bars, and the likelihood these time bars will be adopted in private sector contracts means that contractors must ensure high standards of record keeping and documentation. The reality is that a small proportion of time, money and effort expended by contractors in putting in place excellent procedures and record keeping at the outset of a contract could ultimately save significant time, effort and money at the end of the contract in seeking to recover, loss and expense incurred in delay and disruption to the contract. As someone with firsthand experience of the burden and standard of proof that arbitrators and judges expect contractors to attain in order to substantiate their delay and disruption claims, I can confirm that the majority of contractors fall significantly short of this burden of proof and the standard of evidence required. In summary, good records and procedures avoid disputes and, at the very least, ensure that if a claim does become a dispute, the contractor has the evidence to prove his claim. ________________________________________________________________________________
Matheson Ormsby Prentice 2007 This article first appeared in Irish Construction Industry Annual (9 January 2007). The Information in this document is provided subject to the Legal Terms and Liability Disclaimer contained on the Matheson Ormsby Prentice website. The material is not intended to provide, and does not constitute, legal or any other advice on any particular matter, and is provided for general information purposes only. For further information please contact Damien Keogh, Partner in the Projects and Construction Group at Matheson Ormsby Prentice; email: damien.keogh@mop.ie or telephone +353 1 619 9000.