Contractual Claims in the Construction Industry of the United Kingdom

Abstract

This study is an attempt to highlight the principal sources of claims, the most outstanding types of claims and also suggesting the root causes of such claims in the U.K. construction industry. To achieve this aim, the study has started by examining the definition of claims and their origin. Claims usually arise from breaching the terms in the conditions of contract or duties placed by the common law. The various types of construction contracts and their legal basis have also been examined. The main observation made is that the construction contracts usually allocate risks between clients and contractors. There are several factors which cause claims. These are delay caused by the parties to the contract, discrepancies in contract documents, late site possession, differences in view regarding payments, environmental hazards, damage and injury to persons and property. The court cases examined in the study showed that late possession of site, discrepancies in contract documents, delay and prolongation, payments and damage to property as principal sources of claims. Interviews were undertaken whose aim was to look at the issues raised in the objectives of the study namely the principal sources of claims and the most outstanding types of claims. The major conclusions of the interviews were that variitions and inadequate or late informations played a very key role in all the projects and hence becoming very prominent sources of claims. The study concludes that the major sources of claims are late and/or inadequate information, variation orders and site instructions, late possession of site, discrepancies in the contract documents, late approval;by local authorities, misunderstanding or misinterpretation of contract conditions and inclement weather. The most outstanding types of claims are extension of time, disruption and prolongation costs. The author has endeavored to give explanations for the above factors and also to make recommendations which if adhered to could minimize the incidence of claims in the industry. (