Five top tips to managing potentially damaging construction claims risks

Despite the sometimes inevitable risk of a client making claims, Wes examines the five top tips to ensuring that firms are fully prepared for all eventualities and construction projects have been fully assessed prior to work commencing.

Get it in writing

Contract negotiations are one of the most important factors during projects whereby intentions are stated, budgets are agreed and stipulations are noted down concerning potential problems which may arise. Unless a JCT/NEC contract is being used, firms must ensure that documentation is unambiguously worded to avoid lawyers picking out loopholes in the event of litigation.

Prepare for the worst

Failure to prepare for any potential issues can make a lawyer’s job a lot easier should a claim be made. If checks are carried out to ensure that the correct version of drawings and specs are being used by all parties and a detailed plan of action is drawn up and fully recorded at every stage, then companies will have a strong defence against future claims, alongside detailed evidence to highlight that agreed processes were adhered to.

 
Variations and retentions

Variation requests are often inevitable during construction projects and it is difficult to predict every problem which may arise. The key is to manage the flow of paperwork and ensure that responses are made quickly in order to avoid playing catch up, thus having an impact on finances. Equipping a workforce with the correct tools and knowledge to resolve potential issues will allow for requests to be dealt with effectively.

Seek counsel from experts

Although any contractor should be familiar with standard form contracts, it can be advisable to seek counsel from experts when dealing with highly specialised areas such as insurance and health and safety. Should a major incident occur on site, failure to show that personnel had been provided with appropriate training and PPE can have devastating consequences, including prison sentences.

Record project developments

Effective record keeping can get a construction company out of very sticky situations when faced with legal action. Producing a daily diary of events or communicating via email provides evidence in the event of court procedures and allows a situation to be resolved. Combining site reports, photographic evidence, accounting and third party correspondence into a single system minimises the risk of companies having to pay out when claims are made.

EQUE2’s construction management software is designed to enable companies to provide updates on costs, overspends and any changes to contract negotiations as they develop, long after a project is completed.