In the construction industry, contractors often face multiple events that 
can delay or disrupt their contractual performance. Under most construction contracts, if a contractor incurs additional costs due to events for which the employer is responsible, they are likely entitled to compensation.
To successfully claim compensation, a contractor must generally prove three elements:
- The employer was contractually responsible for the delay or disruption.
- The contractor suffered harm (i.e., incurred extra costs).
- There is a causal link between the event(s) and the delay and/or loss incurred.
However, establishing this causal link can sometimes be challenging. For instance, if a contractor must incorporate several variations for additional work and receives design information later than required, the effects may manifest in various ways, making it difficult to pinpoint all additional costs to each individual variation or piece of design information. In such cases, the contractor may have no other option but to resort to presenting a global claim.
Here are ten tips for contractors to consider before presenting a global claim:
- Avoid a Global Claim Altogether
- If sufficient contemporaneous records or segregated costs are available, use the direct evidence approach to make your claim.
- Ensure Contract Compliance
- Adhere to the specific contract requirements for making a valid claim. Note that some contracts may not permit global claims.
- Identify Non-Employer Responsibilities
- Exclude costs arising from any significant matters for which the employer is not responsible from the global claim.
- Prove the Claim as a Matter of Fact
- Demonstrate that (i) each event occurred, (ii) the employer bears the risk for these events, (iii) the events resulted in delay and/or disruption, and (iv) losses were incurred.
- Consider Unavoidable Losses
- Establish that the loss would not have been incurred regardless of the employer’s risk events. For example, if the contractor’s tender was too low, they might have suffered the loss anyway.
- Be Aware of the Inherent Risks
- A global claim is made as a whole and risks failing entirely if any material contribution to the loss was due to factors for which the employer is not responsible.
- Isolate Causal Links
- Plead separately all parts of the claim where a causal link can be demonstrated, especially if different heads of claim have different legal or contractual bases and valuation methods.
- Prove Your Claim
- Remember, it is the contractor’s duty to prove their claim. A global claim should not reverse the burden of proof onto the employer.
- Establish Cause and Effect First
- Focus on establishing entitlement through a detailed analysis of cause and effect before calculating and supporting the compensation.
- Avoid Simply Listing Events and Losses
- Ensure your case is not just a list of events and a quantification of damage without an apparent link between the two.
Considering these tips, contractors should only present a global claim if the contract allows it (or is silent on the matter), it is impractical or impossible to disentangle the loss attributable to each head of claim, and the contractor has no responsibility for any of the delay or disruption (or has isolated parts for which they are responsible).
davidbrodiestedman@dispute-iq.com
