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6/25/2016

Whattoconsiderwhenpreparingadisruptionclaim

Whattoconsiderwhenpreparingadisruptionclaim
CWGuestColumnist,July10th,2009
ByDavidMeritt
DavidMerrittlistssomeimportantpointstoconsiderbeforepreparinga
disruptionclaim
Disruptionclaimsareroutinelymadeduringthecourseofaconstructionproject
yettheyremainnotoriouslydifficulttoprove.Oneofthemainreasonsforthisis
thatproductivitylossesareoftenextremelydifficulttodistinguish,asopposedto
othermoneyclaimswhicharemoredirectlyconcernedwiththeoccurrenceofadistinctandcompensableevent,suchasan
instructionforavariationduringtheprogressofworkoraproperlynotifiedcompensationevent.
Mostclaimsfordisruptionaredealtwithretrospectivelyandtheclaimantisforcedtorelyoncontemporaryrecordstotryand
establishacausalnexusforidentifiedlosses(cause&effect),whichareinadequateforevidencingalossofproductivityclaim.
Whenthishappenstheclaimantisoftenforcedintothesituationwhereitadvancesaweakglobalortotalcostclaimtotryand
recoveritslosses.Theclaimantmustfirstestablishthatthefactorcausingthedisruptioniscompensableriskunderthe
contract.
Todothis,thecontractneedstobereviewedtounderstandthebasisoftheagreementascertainproductivityissuesmayhave
beenforeseeableandthereforeaccountedforwithintheclaimantsproductivityallowances.Thecontractmayalsoidentifyifa
partyexpresslyacceptedcertainproductivityrisks.Commoncausesofdisruptiononprojectsthatmayleadtoalossof
productionincludesiteaccessrestrictions,unforeseensiteconditions,lateorincorrectdesign,changesinthework,labour
availability,remedial/correctivework,testing/inspections,clientandthirdpartyinterference,changesinconstructionmethods
andadverseweather.
Theprimarychallengestheclaimingpartyfacesinpreparingadisruptionclaimaretoidentifytherootcauseofthelossof
productivityandquantifyingtheassociatedlabourandequipmentproductivitylosses.
Manymethodsexisttoquantifyadisruptionclaimsuchasthemeasuredmilethemodifiedtotalcostapproachatimeand
motionstudyoracomparativeworkstudy.
AlternativelyresearchdatapublishedbytheMechanicalContractorAssociationortheNationalElectricalContractorsAssociation
ontheeffectsofdisruptedworkingmaybeutilisedbutcaremustbeexercisedbecausenoonesizefitsall.

Productivityisnormallymeasuredasproductionperunitofeffectoroutputdividedbyinput(ieunits/hr)oritmaybe
expressedasinputdividedbyoutput(iehrs/unit).Alossofproductivityoccurswhenittakesmorelabourandequipmentto
dothesameamountofwork,therebyincreasingprojectcosts.Acommonerrormadebyaclaimingpartywhenpreparinga
disruptionclaimistoconfuseproductivitywithefficiency.
Efficiencyisameasureofproductivityasaratioorpercentageduringtheaffectedperiods.Iftargetproductionis50unitsper
dayandactualproductionis25unitsperdaythengiventhesameinputtheefficiencyoftheoperationwouldbe50%.If
actualproductionwasequaltothetargetproductionefficiencywouldbe100%.Theefficiencyformulamusttakeintoaccount
thevariableinput(resources)aswellasvariableoutput(production).
Forinstanceitispossibletoincreaseproductivitybutreduceefficiency.Adecreaseinefficiencyisoftenassociatedwithoneor
moresecondaryfactorsunrelatedtotheoriginalexcusableeventbutwhichareimplementedtonegateormitigatetheeffects
oftherootcause.Thesesecondaryfactorsincludeoutofsequenceworking,multipleworkfronts,newlearningandunlearning
curves,fatigue(overtime/shiftworking),dilutionofsupervisionandstackingoftradesinconfinedspaces.
http://www.constructionweekonline.com/article5798whattoconsiderwhenpreparingadisruptionclaim/1/print/

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6/25/2016

Whattoconsiderwhenpreparingadisruptionclaim

Sowhenpreparingadisruptionclaimforalossofproductivityitisveryimportanttoconsidernotjustimmediateeffectsonthe
rateofproductionbutalsotheinefficienciesofsomeofthesecondaryfactors.
DavidMerrittisadirectoratHillInternationalbasedinDubai.Heisacharteredquantitysurveyorandbarrister(nonpractising)
withover22yearsexperienceintheconstructionandengineeringindustriesprovidingcommercialandcontractualadvicetoa
broadcrosssectionofclients.
HehasextensiveexperienceofmajorclaimandarbitrationinEurope,theFarEast,theMiddleEastandAfrica,workingwith
governmentagencies,developers,contractors,specialistsubcontractors,architectsandengineers.
HeisaregularcontributortotheInstituteofCivilEngineeringSurveyorspublicationsandlecturesonthevocationalcoursesfor
theCharteredInstituteofBuilding.HeisalsoanaccreditedCEDRmediatorandregisteredadjudicator.

2016ITPBusinessPublishingLtd.|UseofthissitecontentconstitutesacceptanceofourUserPolicy,PrivacyPolicyandTerms&Conditions.

http://www.constructionweekonline.com/article5798whattoconsiderwhenpreparingadisruptionclaim/1/print/

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