RECORDS, RECORDS, AND MORE RECORDS DURING COVID-19
There has been much debate and opinion recently about a party’s entitlement under a Construction Contract due to COVID-19.
What construction law practitioners won’t disagree on is the importance of record-keeping during this crisis.
As Max Abrahamson famously once wrote:
“A party to a dispute, particularly if there is arbitration, will learn three lessons (often too late): the importance of records, the importance of records and the importance of records. It is impossible to exaggerate the extent to which lawyers can find unexpected grounds, often quite real, on which to cast doubt on evidence if it is not backed by meticulously established records.”
The records that should be kept for any construction and engineering project will vary according to the type, complexity and size of the project. Still, generally, they should include the following:
• The number of men on or off site, work progress and interruptions;
• Activities on-site, identifying the relevant contractors/subcontractors (including other contractors engaged by the employer);
• Productivity and output, recorded against location and the relevant contractor/subcontractor;
• Operating plant and equipment: when they were delivered to and removed from site; the number of hours worked, idle or down time; hire charges, setting up costs and running costs;
• Information and approvals required and received;
• Instructions and orders given (written and oral);
• Test and inspections: when they took place and the results;
• Delays encountered; and
• Weather conditions.
Records are in essence the ingredients a Claims Consultant needs to formulate a claim on behalf of its Clients. The better the records, the better the success rate the claim will have.
When keeping records, it can be helpful to know and understand what the records will be used for.
COVID-19 loss and expense claims should reflect the additional costs which the contractor has incurred. Claims are commonly brought under one or more of the following heads:
• increased preliminaries
• wasted management time
• loss of profit
• loss of productivity or uneconomic working including matters such as increased workforce size; employ multiple work crews; do more of the works outside normal hours by overtime/shift working; pay more for materials/equipment costs; implement different working methods and doing works out of sequence
• increased costs resulting from inflation
• interest for non-payment of money
• finance charges
To use the words of Max Abrahamson, don’t learn the importance of record-keeping when it’s too late.