Claims commonly arise between the parties to construction contracts. This can be as a result of problems including; delays, changes, unforeseen circumstances, insufficient information, and conflicts. Claims might be made for loss and expense, extension of time, liquidated damages and so on. The contract should set out what can constitute a claim and how it should be dealt with.
However, as construction is a complex process, there is not always a straight-forward relationship between one particular breach and one specific effect. As a result, in some circumstances, contractors may make a ‘global claim’ by rolling together a number of different breaches and making a case for a cumulative effect resulting in a single total cost without attributing actual costs to specific events.
Global claims have not always found favour with the courts, as they can ignore other reasons for the delay or disruption, and they place the burden of proof on the employer to carry out a detailed assessment of the claim and how it has been constituted.
Keating on Construction Contracts describes a global claim as ‘...one that provides an inadequate explanation of the causal nexus between the breaches of contract or relevant events/matters relied upon and the alleged loss and damage or delay that relief is claimed for.’
In the case of Walter Lilly v Mackay & DMW (2012), Mr Justice Akenhead said, ‘What is commonly referred to as a global claim is a contractor’s claim which identifies numerous potential or actual causes of delay and/or disruption, a total cost on the job, a net payment from the employer and a claim for the balance between costs and payment which is attributed without more and by inference to the causes of delay and disruption relied upon'
However he went on to quote Mr Justice Donaldson in Crosby v Portland UDC, who stated ‘… it may well be difficult or even impossible to make an accurate apportionment of the total extra cost between the several causative events... I can see no reason why (the arbitrator) should not recognise the realities of the situation and make individual awards in respect of those parts of individual items of the claim which can he dealt with in isolation and a supplementary award in respect of the remainder of the claims as a whole.’
A global claim may be the only route available to the contractor, and the courts may accept this, however, where possible it is considered that it is better to be specific rather than generic. This is a more painstaking exercise requiring that the claimant lists each alleged default, linking it to the delay or disruption and its knock-on effect, all backed by clear records. This is more precise way of establishing quantum and is likely to lead to a more factually-based judgement.
 Related articles on Designing Buildings Wiki
- Alternative dispute resolution.
- Causes of construction disputes.
- Construction contract.
- Contract claims.
- Dispute resolution boards.
- Extension of time.
- Housing Grants, Construction and Regeneration Act.
- Liquidated damages.
- Loss and expense.
- Scheme for Construction Contracts.
Featured articles and news
RSHP unveil their involvement in a boundary crossing which will provide a new entry point into Hong Kong.
With PFI currently under the spotlight due to Carillion, this introductory article explains what they are.
Estimates suggest that up to 30,000 small firms could be at risk of non-payment as a result of Carillion's collapse.
Sir Oliver Letwin to lead an independent review into the delays in the delivery of housing.
As Carillion collapses, read our article explaining insolvency in the construction industry.
43,000 jobs at risk as Carillion declares insolvency..
1961 saw the publication of three important books about urban design that remain relevant today.
Next week the planning fee increases by 20% and new fees are introduced.
How the transformative power of BIM and other digital technologies can be used to gain a competitive edge.
Relevant events and relevant matters are terms used in some contracts, but knowing the differences is important.
Government release statistics showing how many people are now on the property ladder due to Help to Buy schemes.