Our offices are open as usual over the Easter break

Claims within the construction industry

5190 words (21 pages) Essay in Free Law Essays

02/02/18 Free Law Essays Reference this

Disclaimer: This work has been submitted by a student. This is not an example of the work produced by our Law Essay Writing Service. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of LawTeacher.

Claims within the construction industry

Claims within the construction industry are a common phenomenon as contractors often look to claim for financial compensation for consequences that give rise to delay on a project, acceleration or any event that impact that has a detrimental effect on the project and seek reward for the financial implications that are associated with each event.

In circumstances where it is difficult and sometimes impossible to attribute loss to specific breaches of contract it has been known for a contractor to submit a “global claim”. When submitting a Global Claim the general rule is that the cause and effect must be shown for each head of claim.

Wilson (1995) suggested that where a party of a construction contract claims to have suffered losses from a number of different delays caused by the other party an issue could arise as to the extent to which the claimant is entitled to present and pursue its losses in the form of a global claim. Understandably the production and submission of a global claim is a complex process and as such the effect of one decision may impact on numerous trade packages making the identification of the impact difficult to differentiate.

It is this differentiation that has in the past influenced the judiciary deal with global claims in different ways.

Leading cases in global claims prior to the case of Wharf Properties Vs Eric Cumine Associates (1991) were that of Crosby vs. Portland UDC (1967) and Merton LBC vs. Leach (1985) where the courts found in favour of the contractor in both occasions due to the impracticality to identify the actual delay and cost caused by each individual matter that the ‘delay’ and ‘loss’ should be rolled up.

These two cases caused a proliferation of global claims as contractors the world over argued that events which occurred on their contract were so complicated as to make it impracticable , if not impossible to assess the additional expense cause by delay and disorganisation due to any one of the events in isolation from the other events.

The Wharf Properties Vs Eric Cumine Associates (1991) was a landmark case as it was heralded as sounding the end of the global claim. The action was struck out before ever going to trial on the grounds that the employer’s approach was prejudicial to a fair trial, giving no agenda and preventing the architect from knowing what case was going to be made against it.

This position worried employers because the problem with global claims is that they actually prove nothing. Whilst the contractor may be able to provide a list of numerous events which may have caused disruption to his works, the global claim does not prove what the effects of such disruptive events really were to the works. There can be many reasons why a contractor’s final costs are more then his tendered costs, he may simply have tendered too low in the first place, but a global claim makes a huge assumption that all additional time and costs were caused by disruptive events.

Get help with your essay today, from our professional law essay writers!

Qualified writers in the subject of law are ready and waiting to help you with your studies.

Get help with your essay today

from our professional essay writers!

Visit www.lawteacher.net to see how we can help you!

This case set a precedent for global claims cases for a number of years but the hard line approach was balanced by a number of exceptions; most notably ICI Plc vs Bovis Construction Ltd (1992) and GMTC Tools v Yuasa Warick Machinery (1994).

Currently the leading case for dealing with global claims, although not binding as it was a Scottish case is that of John Doyle Construction Vs Laing management (2002). The judge upheld the global claim as the contractor was able to specify adequately the events relied on, and the facts establishing the defendant’s involvement in causing the loss and the computation of that loss.

A solution that had not been seen before was that the courts adopted a more pragmatic approach and were prepared to investigate the facts with the intention of applying a common sense approach which essentially found in favour of the contractor.

It is evident from the above that each case has been conducted on an individual basis with no sign of a strict legal framework to deal with global claims and nothing to strictly define how they should be dealt with within the English Court system.

Therefore the aim of this dissertation is to examine how to establish what constitutes a legitimate Global Claim and their acceptability within the UK construction industry.

Literature Review

There are many sources of literature relevant to the study of global claims, which are in the form of reports, articles and specific legal cases that bear different levels of authority. The literature differs in significance, approach and outcome but addresses the fundamental issues surrounding global claims.

The key issues in relation to this research are logically reviewed by the evaluation of what is a global claim followed by a number of articles outlining different views of personnel within the construction industry.

Currently the leading case regarding Global claims is John Doyle Construction Ltd V Laing Management (Scotland) Ltd (2002) even though it is a Scottish case and not binding within the English courts. There have been numerous articles written by commentators furthering the profile of the decision reached in the case, including that of Mark Wilson in Construction Law Journal and various articles in Construction Law Letter, including the closing paragraph of Shona Frame’s article ‘Scottish Court balances global claims’ being most applicable. Her summary of the case succinctly identifies key issues identified in the decisions, the common sense approach taken by the courts whilst ensuring that the parties adhere to the rules of natural justice through the use of evidence and framing of their dispute and permitting a suitable defence to be prepared. The summary does however highlight one key issue

‘It is by no means an unqualified endorsement of global claims or a ticket to easy recovery by contractors’

This confers with the statement of Lord Macfadyen that Global Claims are indeed ‘a risky business’.

The statement by Shona Frame in her article clearly records that there is still a great deal of uncertainty in the way in which the courts deal with global claims, and the title of the article ‘Global claims at the Crossroads’ written by Mark Wilson almost 15 years ago prior to the decision in John Doyle Construction Ltd V Laing Management (Scotland) Ltd (2002) is still as pertinent today as when it was first written. With no doubt further case law developments will occur in relation to Global claims and the way in which claims relating to delay are dealt with by the courts, something which is affirmed by the statement of Tom Wrzesien in the closing paragraph of his article ‘ Concurrent delay – a map through a minefield’

‘A final word of warning however; this is a developing area of law, so the above proposition are not beyond argument’


This dissertation will be written from a legal perspective and will employ a variety of research methods in order to answer the proposed research question. The research will be undertaken through a study of existing literature and case law, and interviews of legal professionals working within the construction industry.

In order to answer the research question it will be necessary to analyse the categories of claim that commonly occur within the UK construction industry and the situations that give rise to them. It will then be required to then look at what happens in situations where individual claims cannot be identified and one ‘Global’ claim is submitted by a contractor. It is the acceptability of this ‘Global’ claim that will provide the answer to the research question.

Get help with your essay today, from our professional law essay writers!

Qualified writers in the subject of law are ready and waiting to help you with your studies.

Get help with your essay today

from our professional essay writers!

Visit www.lawteacher.net to see how we can help you!

The research method for Chapters 2 and 3 will be in the form of a desktop study to explore the in more detail the culture of claims within the UK construction industry. The basis of Chapter 4 will be primary research gathered by interviewing legal professionals to gather their views on the acceptability of Global claims within the UK construction industry. The dissertation will brought to a close with a conclusion and a number of recommendations.

Chapter Two will be a full investigation of claims within the construction industry. It is important to understand how they are built up in the eyes of the contractor and in what situations they would feel the need to submit a claim. The main situations in which a contractor is likely to submit a claim will be analysed in detail and will lead on to Chapter 3 which will explore the circumstances where it is impossible to identify the impact of one individual claim and a series of claims are rolled into one and submitted as a ‘Global’ claim.

Chapter 3 will conduct an investigation to how the Courts view claims of a global nature. In order to do this previous cases and decisions will be interrogated and a full understanding of how and why the final decision was reached established. It is necessary that this is understood in order to justify the viability of the global claims within the UK construction industry. With Global claims being a very specific item it will be obligatory to look further a field and not only how they are dealt with by the English courts but how other countries court systems have dealt with them historically.

Following on from the desktop research on Global claims, interviews will be conducted with legal professionals and the findings of this will form the foundation of Chapter 4. The present industry beliefs regarding Global claims will be gathered with the lawyers providing their views and opinions as well as passing comment on the way Global claims have been dealt with by the courts previously.

In drawing a conclusion, the dissertation represents a justified appraisal of claims within the UK construction industry, in particular those of a ‘Global’ nature. It evaluates their current presence within the industry and offers recommendation to whether they should be deemed acceptable at all.

Interview Considerations

Research dictates that are two different types of interview structure in existence, structured and unstructured. Structured interviews are rigid in the type and delivery of the question. The aim of this style is to ensure that each interview is presented with exactly the same questions in the same order. This ensures that answers can be reliably aggregated and that comparisons can be made with confidence between the results. It is similar to a questionnaire but provides a clear understanding of what is being asked and provides the option of clarification. Unstructured interviews allow for the questions to differ from one interview to the next.

Bremner (1985) recommends that when conducting interviews if the following rules are adhered to bias can be kept to a minimum:

Read the questions as they are worded in the questionnaire,

Read slowly and use correct intonation and emphasis,

Ask the questions in the correct order,

Ask every question that applies,

Use the cards when required,

Record exactly what the respondent says,

Do not answer for the respondent,

Show an interest in the answers given by the respondent,

Make sure that you have understood each answer adequately and that it is adequate,

And, do not show approval or disapproval of any answer.

It is also vital to take into account the type of question being asked, closed or open ended questions. For the purpose of this dissertation the use of open ended questions will be employed as they allow the interviewee to elaborate and expand on any answers give and to further express their view and opinion, they also allow the interviewer the opportunity to probe specific topics and raise queries during the course of the interview.

Taking into consideration the above it has been decided that the interviews will be of a structured format, include open ended questions and be carried out in line with the recommendations of Bremner.

The method of which the data obtained from the interview is recorded should also be considered. Gunmesson (1991) emphasises two methods of documenting and interview:

The first method consists of entire preservation of the interview in its original form and can be achieved by taking detailed notes or recording.

The second method involves extracting certain elements of the interview to supplement conclusions and ideas but a comprehensive account is not taken.

Using the later method the researcher is tied to only being able to use the information recorded at the time of interview and does not have the option to return to specific areas of conversation and extract further detail.

The research for this dissertation will use the first method as the information will be preserved in its entirety by recording the interview on a Dictaphone.



This chapter will show and explain the variety of claims that can commonly occur within the UK construction industry. It will assess the different situations and circumstances where a contractor is authorised to submit a claim and identify how he would go about doing so when working under a standard form of contract.

What constitutes a claim?

The unique ‘one-off’ nature if the UK construction industry invites a large amount of disputes from which a high volume of claims commonly arise. The adage “time is money” is never more apparent than in a contractual relationship where liquidated and ascertained damages are an overwhelming threat to each and every project. Hibberd and Newman (1999) state “many involved in the construction industry believe that conflict is inevitable and that this is promoted by the standard forms of contract used.

Get help with your essay today, from our professional law essay writers!

Qualified writers in the subject of law are ready and waiting to help you with your studies.

Get help with your essay today

from our professional essay writers!

Visit www.lawteacher.net to see how we can help you!

A claim within a construction contract is fundamentally a demand asserted on one party by another party relating to the services or products specified in the contract. The most common claim on construction projects concern payment, or non payment, for works performed under the general contract. The claimant seeks financial compensation for additional costs that have occurred that are over and above the original contract. Key questions that need to be addressed when looking at a claim are:-

How much money does the claim involve?

Who is going to pay?

Why should the claim be paid?

How are Construction Claims dealt with?

The Construction Industry Institute conducted a study in April 1990 titled ‘The Impact of Changes on Construction Cost and Schedule’, it concluded that a construction claim be a process which begins with a dispute arising between the parties of a construction contract. It signified the importance of each party having a thorough knowledge and understanding of the claims process and being able to recognise a claim is more complex than a mechanism of gaining monetary relief. It also detailed the components within a claim to include, an accurate interpretation of the facts surrounding the dispute, the contract wording and the applicable law. Parties involved in a dispute are reminded that due to large scale construction projects some claims can often involve significant amounts of money and the importance of each party evaluating and preparing for the dispute. Although this process was highlighted in the Construction Industry Institute study it needs to be understood that within construction there is no ‘typical’ claim and that all claims have the potential to be time consuming and expensive.

Types of Claim

The nature of claims involved in the construction industry can often be complex and specific to an individual project, however Kumaraswamy (1995) identifies the categories of construction claims (Table 1) and the causes of construction claims (Table 2):

Table 1: Categories of Construction Claims

Variation due to site conditions

Variation due to client changes

Variation due to design errors

Unforeseen ground conditions

Ambiguities in contract documents

Variations due to external events

Interference with utilities

Adverse weather

Delayed site possession

Delayed design information

Table 2: Causes of Claims

Inaccurate design information

Inadequate design information

Inadequate site investigations

Slow client response

Poor communications

Unrealistic time targets

Inadequate contract administration

Uncontrollable external events

Incomplete tender information

Unclear risk allocation

Looking at Lists 1 & 2 above it would give the impression that claims are an inevitable component of a construction contract. Disputes can develop between consultants, contactor, subcontractors or any party that is named in a construction contract. Understandably the majority of claims will be minor and easily rectified through agreement or a mechanism in the contract.

In simplifying Kumaraswamy (1995) list 2 above it can be recognised the most prevalent categories of construction claim are:

Directed change

Constructive Change



Differing Site Conditions

Directed Change

A directed change is where the client instructs the contractor to complete additional work from what was agree in the original contract documents. This can be in many forms, some common variations include; deletion of a work item, change in specification, change in construction method or the addition of a new work item. The instruction from the client can be given either orally or in writing and giving this instruction it is deemed that the client recognises the directed change. The common area where this causes dispute is where the contractor seeks compensation not only for the cost of the additional work but also for the associated impact on the project programme. Another area of contention surrounding a directed change is where the contractor believes a work item to be a directed change but the client believes the direction to merely be a clarification of what was originally agreed in the contract. Taking this into consideration it is important that as soon as a an instruction is directed by the client that the contractor believes to be a change he gets confirmation in writing to minimise the changes of a dispute later in the project. If there is a disagreement between parties regarding whether an instruction constitutes a directed change then it is most economically beneficial for both parties to deal with the disagreement as soon as it becomes apparent.

Most standard forms of contract provide the client with the option to add changes in the work without breaching the original contract. It is imperative that the contractor follows the instructions detailed in the contract prior to executing and gains the relevant authority approval before the change is carried out.

Constructive Change

A constructive change occurs when there are modifications made to the work originally agreed to in the contract which are not a result of a direct instruction from the client. This is usually down to outside influences that require a change in the method of construction e.g differing ground conditions.


Accelerating the works seem a simple enough process as most standard form of building contracts have a fixed completion date which the contractor signs up to have the works completed by otherwise he is liable for liquidated damages. The contract also contains provisions within it to grant extensions of time and for delay costs to be recovered for events beyond the contractor’s control.

Although as detailed above seemingly simple actually making a claim for acceleration of works to meet a specific deadline can be fraught with problems as it is very hard to pinpoint who is to exactly blame for the acceleration. Contractors frequently include a claim for acceleration costs on top of the much clearer defined delay and loss and expense claims. Judge Hicks said in Ascon Contracting Limited vs Alfred McAlpine Construction (66 CLR 119), ‘the word “acceleration” tends to be bandied about as if it had a precise technical meaning. It does not, and acceleration claims form an unfortunately woolly and imprecise area of construction law’.

The disputes and claims tend to arise when a contract is delayed and the contractor believes that the fault lies with the employer, and subsequently speeds up work to complete by the completion date and avoid damages. He may then seek to claim the costs of this acceleration.

Another instance can be where the client does not expressly instruct the contractor to accelerate the works but also does not grant any extensions of time which places extreme pressure on the contractor to the point of which he feels it necessary to complete the works to avoid liquidated damages. In the absence of express instructions, a contractor may say there has been an implied or constructive acceleration order.

Such claims have not met with much triumph in the English courts, so two Commonwealth cases are generally cited for such claims: Perini Corporation vs Commonwealth of Australia (12 BLR 82) and Morrison-Knudsen vs British Columbia Hydro and Power Authority (85 DLR 3d). However, in both cases the client was in breach of contract in refusing even to consider operating the extension of time clause. This is a very different situation from simply disagreeing that an extension of time is due and is relatively uncommon.

Get help with your essay today, from our professional law essay writers!

Qualified writers in the subject of law are ready and waiting to help you with your studies.

Get help with your essay today

from our professional essay writers!

Visit www.lawteacher.net to see how we can help you!


In occasions where the parties cannot reach an agreement a form of dispute resolution is commonly used to resolve the matter. This is an adequate end product in disputes where individual claims can easily be identified and a cost put against each one but in instances where it is impossible to calculate the effect and cost of any one claim it is common for contractors to ‘roll up’ a number of claims and submit it as one ‘Global Claim’.



Having established the situations whereby a contractor can submit a claim in the previous chapter this chapter will explore what happens in the event where a contractor does not seek to attribute loss to one specific breach of contract, but rather alleges a composite loss as a results of all of the alleged breaches, this is called a “global claim”.

What is a global claim?

There are various definitions of what is a Global claim given by the Judiciary, with Byrne J . in the Australian case of John Holland Construction v Kvaerner R.J. Brown Pty Ltd [1996] 82 BLR 8 appearing to define a Global claim as;

“The claim as pleaded … is a global claim, that is, the claimant does not seek to attribute any specific loss to a specific breach of contract, but is content to allege a composite loss as a result of all the breaches alleged, or presumably as a result of such breaches as are ultimately proved”.

While the editors of Building Law Reports in their commentary on on Wharf Properties v Eric Cumine Associates (No. 2) [1991] 52 BLR define a Global claim in plain English as;

“Global claims are “ones where the connections between the matters complained of and their consequences, whether in terms of time or money, are not fully spelled out”.”

A further definition offered by Hudson (1995) defines a global claim as;

“Global claims may be defined as those where a global or composite sum, however computed, is put forward as the measure of damages or of contractual compensation where there are two or more separate matters of claim or complaint, and where it is said to be impractical or impossible to provide a breakdown or sub-division of the sum claimed between those matters”.

The quotes above illustrate how that there are differing views of global claims and there is not one exact definition.

How have Global claims been dealt with historically?

In dealing with Global claims the major stumbling point on which legal arguments have centred is the ‘rolled-up’ element. Construction contracts are complex, and as such the impact of one decision may impact on numerous trade packages, identifying the impact can, especially on larger projects can be difficult, sometimes impossible to differentiate.

The historical approach taken when a party makes a claim, and one that has been reflected in the courts decisions, has been as follows;

Breach/Claims Event

The claimant must prove;

that the breach of contract, breach of duty or other claims event has actually occurred; and

that the defendant is factually and legally responsible for it.


The claimant has the burden of proving that the breach/claims event caused the loss alleged to have been suffered.


The claimant has the burden of proving loss suffered and amount of that loss.

As noted previously, in complex construction contracts, where a loss, or more likely a series of losses, may have been caused by various breaches, it is often not possible for the Claimant to fulfil the outline of the agreed Claim principle, and as such a ‘Global’ or ‘Rolled-up’ claim will be submitted in an attempt to obtain a remedy to the loss incurred.

There have been many cases where a contractor has submitted a ‘global’ claim due to the impossibility of calculating the impact of each event individually. The way in which the courts have dealt with each case has differed somewhat, the leading cases and their outcomes are summarised below.

Crosby v Portland (1967)

At the time this case set a bench mark and resulted in a rise in contractors submitting global claims.

The arbitrator ordered that amounts attributable to certain items should be assessed by way of varied rates. In respect of the balance, the contractor submitted a general, ‘global,’ claim for delay and disorganisation. The arbitrator held that 31 weeks of the 46 week delay was due to the various matters for which the employer was responsible and that part of the disorganisation of labour cost was also attributable to these matters. He held that it was “impracticable if not impossible” to allocate parts of the ‘rolled up’ award to any one of the causative factors in isolation. At the time this case set a bench mark and resulted in a rise in contractors submitting global claims.

On review of this case it appears it was only because individual portions of delay and disruption could not be identified and added separately to the cumulative total of delay and disruption that a rolled up award of quantum was required at all. If separate identification had been possible then it would have been relatively easy to assess individually the loss thereby.

Merton V Leach (1985)

In the case of London Borough of Merton v Leach the contractor sought loss and expense due to numerous variations and late instructions. The arbitrator addressed whether an individual global loss and expense claim could be permitted, where the claimant was unable to identify a separate value to each causal event, which is contrary to the basic principles of dealing with a contractual claim. The court ruled that a rolled up award for two different claims could only be made in a case where the loss could not be separated. In addition, the contractor has a burden to prove in relation to each individual item that they have complied with any contractual preconditions to each head of claim. However the Court did not rule out certain occasions where a ‘global’ award would be allowed. Upon making the point with regard to ‘global awards’, certain elements within the industry construed this to mean that ‘global claims’ would be allowed as well.

Wharf Properties v Eric Cumine Associates (1991

This was a Hong Kong case decided by the Privy Council, the case was struck out as the claimant was deemed to have made no attempt to link the cause with the effect in respect of a claim by the Employer against his Architect for failure to properly manage, control, coordinate, supervise and administer the work of the contractor as a result of which the project was delayed. It was pointed out to the court that global claims had been allowed in the two English cases described previously, however, it was deemed in this case the employers approach was prejudicial to a fair trial , giving no agenda and preventing the architect from knowing what case was going to be made against it. It was thought this case was to signal the end for the ‘global claim’ as Employers have since used this case as justification for totally rejecting any claims based on a global approach.

Bernhards Rugby Landscapes V Stockley Park (1997)

Even after the landmark case of Wharf Properties v Eric Cumine Associates (1991) the courts seemed reluctant to strike out a global claim and instead give the claimant the opportunity to amend an incomplete claim, or to supply further particulars to remedy the deficiency. Even with the suspicion of the global claim failing at trial, the courts allowed the evidence and arguments to be presented before a decisions on the claim was given, this approach was adopted from the Australian case John Holland V Kvaerner RJ Brown and resulted in the claimant of the Bernhards Rugby Landscapes V Stockley Park (1997) being given leave to amend their claim.

John Doyle Construction Ltd V Laing Management (Scotland) Ltd (2004)

Get help with your essay today, from our professional law essay writers!

Qualified writers in the subject of law are ready and waiting to help you with your studies.

Get help with your essay today

from our professional essay writers!

Visit www.lawteacher.net to see how we can help you!

Although a Scottish case and not binding by English Law this case hailed a re-emergence of Global Claims. The judgement in the decision represented a major shift in global claims, adopting a much more permissive stance. It was established a global claim to be acceptable in its truest form where all the causes of all the effects can be shown to be the fault of the employer.

Laing were acting as main contractor and subcontracted the superstructure element to Doyle. Following late completion of the works Doyle submitted a claim for a 22-week extension of time as well as loss and expense.

On presentation of its claim to the court Doyle submitted schedules and reports detailing the causes of the delay and disruption to their works. They stated ‘despite best efforts, it is not possible to identify positive links between each such cause of delay and disruption and the cost consequences thereof’. Laing sought to have the claim struck out prior to going to trial but this was rejected by the Court.

Due to the complexity of the project

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please.

Current Offers