Construction claims are complicated given the complex nature of construction work. As there are so many stakeholders such as clients, contractors and subcontractors, solving claims can be quite difficult. If those conflicts are not managed properly, claims and disputes can delay the construction project. Hence, the claim management process is essential during the entire period of the construction project. Here, we share some insights into claim management in India:
Common causes of claims:
. Here are some of the causes of claims:
- Delay in handing over the site
- Delay in payments
- Delay in the supply of drawings
- Delay in starting work
- Refund of maintenance deposit
- Delay in completing the work
- Loss due to idle labour or idle machinery
A good claim management system has four phases which are below:
- Claim prevention:
The prevention of claims is essential to the successful completion of any construction project. The claim prevention process begins at the contract formulation phases of a construction project plan and the contract documents are being developed. It is important that all requirements related to the project be included in these documents. Claim prevention must be carried out on a daily basis through careful planning and execution of work. Any deviations from the plans and specifications must be promptly corrected and any changes to the scope of work must be carefully documented.
- Claim mitigation:
In general, construction activities are performed in outdoor and highly sensitive environments. It is essential to minimise the occurrence of claims through the contract progression. Risk management plans and a well-defined scope can help to reduce the occurrence of claims.
- Claim identification and quantification:
The identification of claims can be made easily by contract provisions, construction claim analysis and the scope of work. If an activity is identified as a claim, it can be quantified in terms of a time extension to the completion of the contract. In this phase, the critical path analysis has to be made to calculate the project delay. The purpose of this phase is to identify the damages caused by the delay and to support the claim with solid evidence. This is a crucial phase in the claim process, as it will determine whether or not the claim is valid and how much compensation will be awarded.
- Claim resolution:
Claim resolution is the process of resolving the claim issues. The first step in claim resolution is identifying the issues in dispute and ensuring that all parties have a clear understanding of the problem. Once the issues have been identified, the next step is to determine whether the parties can reach an agreement through alternative dispute resolution methods such as negotiation, mediation and arbitration. Litigation is usually the last resort.
Looking for a company for claim management in India?
We, at Contract Square Pvt Ltd, are experts in handling construction disputes and settlements. We take care of all documentation, correspondence, review, analysis, and evaluation to strengthen your claims. This leaves you free to concentrate on the execution of the project.
To know how we can help you, mail us at enquiries@contractsquare.co or call us at +91 9903023893.
