The three essentials to entitlement
MAX Abrahamson (29 October 1932 – 7 October 2018) was an Irish lawyer, internationally recognised as an expert in construction law, and eminent construction arbitrator, once said that specialist contractors only need three things to secure your entitlements:
RECORDS, RECORDS and RECORDS
Whether it’s recovering the true cost of variations, stopping the contractor from setting off money from your account, or getting paid for delays, you must be able to prove to a third party that your version of events is correct and your assessment is fair and reasonable.
And please trust me on this, in order to do so, you will need those records!
Good written and photographic records
Keeping good written and photographic records is a fundamental issue, the importance of which cannot be overstated.
Please, please, please, whatever you do don’t be put off if the contractor says: “you’re being contractual”. That is exactly what the contract requires you to do! And if you don’t they will clobber you! At the time of writing this article, I am acting for a specialist contractor who is being denied his delay claim of £150,000 because the contractor says he has NOT issued notices and records!
Regardless of the size and value of the work, good records are essential in order to protect yourself. The scale and complexity of the work may dictate how much time and effort you need to put in, but even the most basic records can offer you protection.
Almost all construction disputes deal with events that occurred weeks, months or even years in the past. Parts of your works are by their very nature covered up, so cannot easily be inspected at a later date.
Any records that you make at the time will be far more valuable as evidence than your memory of what happened, particularly if you have the records to prove that the records and notices have been issued to the other party at the time the events took place.
Don’t ignore the contract
You must check what the contract says about records and ensure you comply. It’s not uncommon for a failure to submit notices and records correctly to be used as an excuse to reduce or withhold payment or blame you for delays that aren’t of your making.
In addition to the records you’re required to keep contractually, it’s a good idea to maintain good records for your own purposes. Good records will assist you in preparing claims for delays or additional work and also in rejecting any claims made against you for delays or damage.
Take careful note of the date and time, the name of individual, and the matters discussed for every telephone conversation you have regarding your works.
Watch out for site meetings, formal or informal, because they’re a great way for the contractor to stitch you up. Keep your own record of what is discussed and dispute any minutes with which you disagree and ensure that the minute is changed, or your objection noted. In fact, make sure you definitely get minutes or send them your own!
My top tips about records
Make sure you comply with the contract and don’t be put off by anything the contractor says.
Verbal discussions/instructions – “if it isn’t written down it wasn’t said”, so don’t act on verbal instructions and always confirm them back in writing to the contractor.
Access dates – make sure you can actually get at the various parts of the job when you are supposed to and tell the contractor when and why if you can’t.
Delays – notify the contractor about everything that holds you up or interrupts the regular progress of your works.
Sequence - you will have priced and programmed the works to proceed in a logical sequence. If you are expected to go backwards and forwards to and from different areas, you will be less efficient, and your costs will definitely increase – so keep good records
When you have completed the various sections of the works make sure you notify the contractor and get them signed off if possible.
Ensure you get someone to sign to acknowledge the date and time that you handed the works over.
Photographs/video can be invaluable. You can record exactly what was done, and when.
Use a camera that records the date and time, but it’s still a good idea to use the old fashioned idea of taking a picture of the headline from the Sun or Mirror for each day you’re taking photographs.
Ensure you keep records of what all the other trades are doing, when they start and finish various areas if these are impacting on your works.
Managing and maximising entitlement
If you want to be successful, and who doesn’t want to do well and make a decent profit, you must manage every stage of the process. Here are a few ways in which you can manage and maximise your entitlements:
- give your team a thorough briefing or workshop as to the contract etc.
- use the tender assumptions/plans to instil awareness of how the job should be done
- identifying opportunities or risks immediately they appear on the horizon
- use a system of site records and notices which help you to maximize your entitlements
- allocate sufficient and appropriate staff resources to manage the process
- use a procedure for regular monitoring of all aspects of the project
These procedures need to be operated as a matter of routine on every job. This can be done via standard checklists, linked to your company’s QA procedures. But, however you do it, please don’t ignore the opportunities to minimise risk and maximise entitlement. And please remember, RECORDS, RECORDS, RECORDS. They really are the key to protecting your interests and maximising entitlement.
If a structured approach is followed on all jobs, then it will soon become second nature to you, and financial disasters should become a thing of the past and profits will improve.
As ever, if you have a problem, or need any help minimising the risks and maximising profits, please do not hesitate to contact us.
Barry is MD and co-founder of StreetwiseSubbie.com which provides business solutions for specialist contractors throughout the UK