Key Steps in Construction Claims Management

Any construction project has inherent risks and high potential for a contractual dispute because of such circumstances as delays, change of scopes, and unexpected conditions. Disputes are inevitable in most construction projects and this paper seeks to highlight the importance of managing construction claims to avoid adverse consequences of such disagreements. Here in our blog, we will look at the essential aspects of construction claims management process that every contractor, project manager, and other related parties should acquaint themselves to in order to manage such issues well.

1. Identify the Cause of the Claim

The first process in construction claims management is the identification of cause of the particular claim. They often arise out of delay, the extent of work, discovered conditions or unclear contract provisions. In this way, project teams want to determine the root of the problem to avoid new levels of conflict and to begin collecting the necessary papers. Proper demarcation makes everyone involved to have a clear picture of what it is all about and how it affects the project.

2. Review the Contract Terms

The subsequent step is evaluation of the contract after the cause of the claim is determined. Legal agreements are very central to any kind of construction venture since they pinpoint tasks, duties, and powers of all parties. This paper aims to stress that controlling claims requires proper awareness of the contract provisions that pertain to claims, compensation, time limits, and dispute resolution mechanisms. Adherence to these terms usually defines the success of a given claim.

3. Document the Event and Its Impact

Documentation is claimed to be a holistic process that is fundamental when it comes to construction claims management. Write down accounts of occurrences that lead to the claim: diary, photographs, letters, meeting agendas and minutes, and calendars. As a rubric of the claim, analyse and measure the degree of the effect that the claim gives to the implementation of the project in relation to time and cost. This information will be useful if the claim gets to arbitration or trial because it will act as the basis of your case.

4. Notify the Relevant Parties

In construction contracts, there are standard procedures laid down in case of occurrence of a claim. The failure to observe these notification procedures normally leads to the loss of your right to make a claim. It should also be effectively as well as efficiently ensured that formal notice is served to the correct parties such as the project owners, contractors, and the legal representatives of the project by the time agreed in the contract.

5. Analyse the Claim for Merit

But wait, further course must not continue without considering if the given claim is legitimate or not. In this stage, legal and technical people review the contract and analyse its adherence to the recognition of a loss claim that occurs in the industry. If the claim is again not going to succeed then it might be more desirable to compromise and reduce the dispute through an out of court settlement than going through the expense of trial.

6. Prepare a Detailed Claim Submission

Rather, a well-prepared claim submission is considered crucial to succeed in this endeavor. A proper statement of an actionable claim, underlying facts, contractual provisions on which the claim is to be made, documentation to support the same, and a precise calculation of time and cost likely to be incurred must be substantiated in the submission. As with any legal process it is in your best interest to make your submission as organised and thorough as possible for the best outcome.

7. Engage in Negotiation or Alternative Dispute Resolution (ADR)

Parties to a dispute should turn to legal processes, after they exhaust authentic negotiation processes or other forms of ADR like mediation or arbitration cases. These processes are normally less complex and time consuming, less costly and less official when compared to court systems. Litigation on the other hand will result in destruction of working relations between disputing parties, negotiations facilitate direct contact of the parties in an endeavour to agree on solutions.

8. Monitor and Update Claim Status

The managing of claims does not stop there with the submission of the claim. This means that all the involved parties should always be updated of the status of the claim.

Informal contact means that people are informed about events taking place, and where opportunities for securing or resolving cases are available such are chased.

9. Pursue Litigation if Necessary

If all other strategies are unsuccessul, alternative may remain the last one: litigation. This should however be undertaken as the last option because it is expensive and time consuming. This means that in case of a trial, it is important you engage professional legal assistance in construction legal practices.

10. Learn from the Experience

Last but not the least, all the claims hold a great deal of learning. Even if the claim was settled, the parties should take time to examine the events leading to its settlement with a view of making improvements in other similar projects in the future. This may mean rewording the contract provisions, enhancing performance documentation or selecting higher quality project delivery systems to reduce proactively the occasions when claims occur.

Claiming in construction projects involves a sequence of procedures that should be followed strictly by observing construction documentation and constraining provisions. Actually, construction professionals have clear opportunities to manage claims and elongate the period when disputes may not be beneficial for involved parties if they follow these key steps. Again, bounce communication and coordination eliminate claims where ever possible making way for successful project delivery.