Construction claims are often part of a construction project. Therefore, an effective construction claims management planning process will help reduce the number of claims while helping to handle claims that are complicated with less legal fees and time wastage. A construction claim management plan will include some elements; they are as follows:
Purpose – Your plan should include a clear statement of why your plan was prepared and implemented.
Objectives – A clear list of the plan’s objectives will give the team direction and help them achieve their goals.
Strategy – This section will state the process that is involved in implementing the actions to achieve the stated objectives.
Contract Analysis – The contract analysis will identify the risks, opportunities and include the dispute resolution considerations.
Applicable Law Analysis – The key issues that need to be considered when making decisions regarding claims and disputes.
Detection / Recognition [KPI’s and Managerial Tools] – Key Performance Indicators (KPI’s) can be used to detect when claims can arise. These indicators will let management know in advance how claims can be reduced while ensuring the project is completed
Action Plans – If there are variations in the KPI’s, actions plans can be put in place to manage the situation.
Lyle Charles Consulting recommends that construction firms look at their construction management plan as a document that will help define and manage construction claims, not one that will eliminate them.
Written by Lyle Charles
Construction delay claims can disrupt a project while costing the company money and diverting critical resources. To reduce construction delay claims, many companies are now taking a proactive approach. This involves identifying and mitigating risks that will minimize claim-related costs and optimize claim outcomes. However for those construction companies who are taking a reactive approach to construction claims, here are the steps to solve your claim and reduce claim costs.
Investigation and evaluation – Effective construction claims management involves assessment of the strengths and weaknesses of each party. This will involve assessment of all facts, by gathering all claim related material. If there are any loopholes in the information, the missing information should be gathered at this point.
Plan formulation – The plan should include the relevant facts and the legal theories that affect the claim. The costs of the plan should also be assessed, to hold these funds if payment is necessary.
Identification, allocation, and management of resources – A claim manager should be responsible for coordinating and implementing the claim resolution plan. This may involve hiring a consultant or an attorney, specifically for this purpose.
Periodic reassessment and resolution – When the defense proceeds, more information, and facts may come to light that will alter the views of the claim. Therefore, the contractor will have to reassess their position throughout this process. Constant monitoring during this final step will minimize claim costs and maximize claim recoveries.
Lyle Charles is a construction claims consultant who can cater to your construction project needs.