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Loss and expense

Loss and expense Claims by contractors for loss and expense arising from a disturbance to progress of the works are one of the most debated and contentious areas of construction law, often leading to disputes between the employer and the contractor. This Practice Note explains the basics of loss and expense claims and looks at how the subject is dealt with in the JCT, NEC and FIDIC contracts. For a comparison of the specific provisions in each of these contracts, see Practice Note: Comparison between JCT, NEC and FIDIC time and money events. For a list of the key issues to consider in relation to a claim by a contractor for reimbursement of loss and expense and/or an extension of time, see also Practice Note: Time and money claims. What is loss and expense? Loss and expense is the term often used (most notably, in the JCT contracts) to describe the additional costs incurred by a contractor as a result of disturbance to the regular progress of the...

Quantum in construction disputes—key cases

Quantum in construction disputes—key cases This Practice Note sets out some of the key and/or recent cases that deal with heads of losses which are commonly claimed in construction disputes, such as in defects claims, for loss of profit, overheads and preliminaries, wasted management costs, passing on settled claims and other examples. It is not intended to be a comprehensive summary of all cases (and is focussed on construction cases rather than general principles), but is a useful starting point when considering various claims. For details on some of the key considerations that may need to be taken into account when a party on a construction project is formulating the quantum aspects of a claim, see Practice Note: Quantum in construction claims. That Practice Note highlights considerations for common claims made under the contract (for example, in relation to loss and expense or suspension), as well as those where the dispute arises from a breach of contract or negligence claim (ie a claim for damages). It looks...

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How are head office overheads and loss of profit assessed as part of a contractor's claim for loss and expense?

How are head office overheads and loss of profit assessed as part of a contractor's claim for loss and expense? What is a claim for loss and expense? Under a construction contract, a contractor will usually be entitled to claim loss and expense where it suffers delay or disruption to the progress of the works, due either to matters within the employer's control or to breaches of contract by the employer. Claims for loss and expense are commonly brought under various different headings (see Practice Notes: Loss and expense and Loss and expense claims—practical tips), two of which will usually be a contractor's claim for overheads (also known as prolongation costs) and for loss of profit. On what basis can a claim be brought? Contractors often believe that an entitlement to claim overheads and loss of profit (as well as other heads of loss and expense) automatically follows from an entitlement to an extension of time. This is not usually the case and each claim must...

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No overheads awarded as damages (Fluor v Shanghai Zhenhua Heavy Industry (ZPMC))

Construction analysis: In dealing with outstanding matters following its earlier judgments on liability and quantum, the court declined to award overheads because the claimant had not proven its losses on the evidence. However, the court did award a higher rate of interest than ordinarily applied in TCC claims because the claimant had tendered suitable evidence as to its borrowing rates. Issues relating to conversion of part of the judgment that had been awarded in foreign currencies were also considered.

Lexis®PSL Construction monthly highlights—February 2015

February 2015 highlights from the Lexis®PSL Construction team. This month’s highlights include analysis of managing the risk of under-delivering on a construction project, what happens when a contractor goes bust during a build, and construction law in Ireland. There is also all the latest headline news and cases from the construction law world. New content this month includes Practice Notes on pricing and risk in PPC2000 and a new Precedent Special Conditions: Institution of Chemical Engineers (IChemE) Form of Contract—Lump Sum Contracts, the Red Book, fifth edition (2013).