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Construction Law/Claim Preparation Cost


Good day to you.  I would like to seek advise if whether a Contractor should be entitled to claim for the cost of preparation of a claim itself?
I am a project QS from the Consultant side in Al Ain and our Contract is based on a bespoke fidic 1999. most of the fidic 1999 was retained except for some minor changes. The Project has a Fixed Priced Lump sum contract.
The scenario is that some of the answer to the Contractor's Request for information (RFI's) has become the Contractor's entitlement to claim.
Now, aside from the cost of the Variation/Claim itself, the Contractor had added the preparation costs in their formal claim.
We already replied that it is part of their scope already to prepare their claim since it is stated in Clause 20.1 that the Contractor shall submit the claim.
Is the Contractor entitled to claim for the cost of their Engineers, Project Directors, QS, Electrical Engineer, HSE, draftsman involvement and stationanries in the preparation of a Claim?
One hypothetical example (closest to the truth here in our project) is that they are claiming for a Variation of AED 59,000.00
with the breakdown of:
                   A.)  Value of works        AED  1,000.00
                   B.)  Preparation Cost          58,000.00

Dear Jaime,

Generally, the Contractor is responsible for preparing the claim, but he can recover the cost of preparing a claim, but he must justify his costs.  I would suggest that costs of AED59,000 in preparing a claim for works valued at AED1,000 is excessive.  You could ask for supporting documentation in the form of timesheets and justification for their involvement in the claim preparation.  Generally the cost of preparing claims is about 5-10% of the value of the claim.  

I would learn from this experience and be proactive in future, ensuring that all variations are costed and agreed when the order is issued.  You could even add a phrase to the RFI's to state that work will be valued and paid in accordance with the Contract, and then give your valuation within 7 days, which should reduce the claims.  

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
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.Romanian Proverb 2002
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I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
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The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

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