Welcome to the new issue of Grow Your Knowledge Newsletter where you get free, ready to use, actionable, clear information regarding FIDIC Contracts and Construction Claims.
Today at a Glance;
➤ Term of the Week
➤ One Tweet
➤ Contract Administrator’s Responsibilities after Receiving Your Claim
TERM of the WEEK
ONE TWEET
Happy Thursday.
You should not only consider your own perspective while designing your claim strategy.
You should also address the issue from the perspective of all parties.
Such as from the Contract Administrator’s point of view.
The Contract Administrator’s turn starts after receiving your claim.
Let’s look at the process through the eyes of the Contract Administrator.
STEP 1: The Contract Administrator should consult with you
At the beginning, the Contract Administrator should;
➤ Review the claim, and,
➤ Determine the claim’s compliance with the contract
After this quick check, the consultation process begins.
You should treat the consultation process as an opportunity to;
➤ Better explain your claim and its details
➤ Reach an early agreement
➤ Solve the problem
After the consultation;
If the agreement is achieved;
➤ You should give effect to the agreement
If the agreement is not achieved;
➤ You should wait for the determination process
In accordance with 2017 FIDIC Red Book Sub-Clause 3.7.1 [Consultation to Reach Agreement];
“The Engineer shall consult with both parties jointly and/or separately and shall encourage discussion between the Parties in an endeavour to reach agreement. The Engineer shall commence such consultation promptly to allow adequate time to comply with the time limit for agreement under Sub-Clause 3.7.3 [Time Limits].
In accordance with Sub-Clause 3.7.3 [Time Limits];
The Engineer shall give the Notice of agreement, if agreement achieved, within 42 days or within such other time limit as may be proposed by the Engineer and agreed by both Parties (the “time limit for agreement in these Conditions), after;
(c) in the case of a Claim under sub-paragraph (a) or (b) of Sub-Clause 20.1 [Claims], the date the Engineer receives:
(i) a fully detailed Claim under Sub-Clause 20.2.4 [Fully Detailed Claim]
STEP 2: The Contract Administrator should make a fair determination
“Engineer’s fair determination should add value to the resolution of the claim.”
Before making the determination, the Contract Administrator should examine in depth;
➤ The cause
➤ The link between the cause and the effect
➤ The contractual entitlement
➤ The final effect on the Time for Completion
➤ Calculations of the additional payment
However, in some cases, the information included in the claim may not be sufficient.
At that time, you will be required to provide further information which is;
➤ Relevant
➤ Valid
➤ Credible
After the assessment of that information your claim will be;
➤ Approved, or,
➤ Rejected, or,
➤ Accepted with reduced quantum
STEP 3: The Contract Administrator should give a “Notice of Determination”
“The Contract Administrator should respond to a claim within the contractual time frame.”
Notice is a bridge that connects you to determination.
It will help you reach details, such as;
➤ Reasons of the determination
➤ Specific supporting particulars
by the details of the Notice.
If you are SATISFIED with the determination;
➤ You should execute the determination
If you are DISSATISFIED with the determination;
➤ You should give a Notice of Dissatisfaction
In accordance with 2017 FIDIC Red Book Sub-Clause 3.7.3 [Time Limits];
The Engineer shall give the Notice of his/her determination within 42 days or within such other time limit as may be proposed by the Engineer and agreed by both Parties (the time limit for determination in these Conditions), after the corresponding to his/her obligation to proceed under the last paragraph of Sub-Clause 3.7.1 [Consultation to reach agreement].
If the Engineer does not give the Notice of agreement or determination within the relevant time limit;
(i) in the case of a Claim, the Engineer shall be deemed to have given a determination rejecting the Claim
Formulate the effective claim and present it in a professional way.
See you next week.
P.S. As always, we hope you find this issue useful and we welcome any comments or feedback you may have.