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  • Writer's pictureStaveley and Partners

Transforming construction projects: why should you plan for a claim?

Construction is not an industry that's built on a wing and a prayer - it's one that's based on planning. Unfortunately, with the best planning in the world things don't always go as you would like. Materials are delayed, the weather intervenes ...  global pandemics arise, inflation soars... you get the picture. 

Planning on a construction project is an essential part of the process, but what about planning for a claim? It seems counterintuitive to plan for things to go wrong, but in any context involving bricks and mortar you would usually have an insurance policy, so why not have one for disagreements? 

Claims add 50% to planned capital costs

A landmark report from RICS in November 2020 looked at the toll that disputes take on major construction and engineering projects worldwide. Across nearly 1,200 in 88 countries, the report found that:

  • Delays typically extend original schedules by more than 71%

  • Extensions of time total 600 years

  • The cumulative value of sums in dispute exceeds US$48.6 billion

  • The average claimed value accounts for over half of planned capital costs

The most common causes of construction claims 

The most common cause of project delay and dispute comes from changes in the scope, but other key areas of contention included: 

  • Design-related problems

  • Poor management of third parties

  • Inadequate contract management

  • Deficiencies in workmanship 

Transforming the success of construction projects 

This fractious image of the industry is one that we're all keen to shake off, and many businesses are doing just that. According to RICS, there is already evidence of that, with some of the leading contractors improving training and processes. 

However, it's not just internal industry challenges that lead to claims - there are plenty of outside influences that make it impossible to plan for every eventuality. Furthermore, we all know that with the best planning in the world 'stuff' happens.

While technology is very much our friend for improving communication, planning, and reacting to unplanned changes, there's little replacement for common sense. Common sense tells us that we need to expect the unexpected and plan for it. This is where construction claims funding is a game changer.

Changing the game with construction claims funding

Construction claims funding is the unique service of our partner company, Tungsten Capital, providing a true no-win, no-fee solution to resolving disputes. Unlike litigation funding, it's designed to address issues at the point of receiving or raising an entitlement claim in order to keep costs down, projects moving and relationships intact. 

It keeps the costs of raising a claim off your balance sheet, with the full cost only being taken out of the compensation fund if you win your claim. That means you don't have to be the biggest player in the market to approach a dispute fairly and reasonably, and with the right claims consultant, you know you have people on your team who are proactively motivated to work towards a resolution rather than fuelling the fire.

Want to find out more?

Transform your way of working and improve construction outcomes.

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