google-analytics-for-wordpress domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /var/www/vhosts/overford.com/staging.overford.com/wp-includes/functions.php on line 6131The post Final Accounts: How do I get the result I want? appeared first on Staging - Overford.
]]>So how can you ensure a successful final account agreement and avoid those legal bills? We take a look at some suggestions…
Firstly of course, and as always, records are critical. These records will form the foundation for successful negotiations. To demonstrate entitlement to payment of sums due under the contract, you will need good and accurate records. Especially if any matters are disputed.
This is one of the many areas which causes disputes and problems for contractors and clients alike. Without good record keeping, finalising the account will prove challenging. A helpful tip to remember when compiling your records is the three “c’s” clear, concise and comprehensive.
Changes from the original contract scope will inevitably lead to a change in price. You will need to negotiate these changes or variations, ideally throughout the contract. You will need to demonstrate your entitlement to these changes and as always, you will need good records.
If your contract includes a fluctuation provision this will need to be reviewed carefully. It will likely involve a complex calculation which can increase or decrease elements of your contract sum.
If your works have been delayed through no fault of your own, you may be entitled to claim for loss and expense. The contract will likely deal with notice provisions. But, it is likely that any loss and expense will be discussed at length in the final account negotiations. You should be prepared to revisit your claim and explain your entitlement, including what mitigation measures you put in place. Once again, good records are needed.
Again, something that is often neglected, it is critical to check what your contract says. Different contracts will have different requirements for the submission of final accounts, particularly in terms of the form they take and the dates at which it must happen. It is important to understand the difference between an interim final account and a final statement.
Under the standard JCT, for example, the finalising of the accounts statement will lead to the resolution of any disputes. Note that there is often a very short time from the issuing of a final statement and it becoming conclusive. Once finalised and that timeframe has passed, it will not be possible to dispute any sums due.
Something that is important to reiterate here is that not every contract will be the same. Not even every issue of the same contract will be the same from project to project. Some will have had changes and amendments made that may change the risk profile significantly. You should be alive to any adjustments that may have been made to what you might expect as the ‘norm’ in a contract.
Ultimately, final account negotiations are likely to be a matter of commerciality for both sides. But a well-prepared negotiation where you are in full possession of the facts, records, and documentation, will ensure the most probable chance of success.
Should you need any support or advice on the issues outlined in this article, just get in touch with Jason or Guy today.
The post Final Accounts: How do I get the result I want? appeared first on Staging - Overford.
]]>The post Make Sure You Get Paid appeared first on Staging - Overford.
]]>The construction industry has something of a bad reputation when it comes to managing cashflow. Earlier this year, research found that half of all invoices were paid late.
In some cases, those invoices are never paid at all. Nobody can guarantee one party will pay another party. Even the projects which start on the very best foot, sometimes go south when it comes to payment.
However, in our time helping construction companies secure payment, there are several issues we see time and time again.
Prevention is always better than the cure. Getting things right at the outset should mean that if there is a payment issue, you are best placed to get an adjudication decision in your favour.
So, on that note, we thought we’d share with you some of our top tips for making sure you get paid:
This may seem obvious, but it’s surprising how quickly the contract is forgotten once the project starts and the project team become too busy!
Whatever your contract says about payment, follow it. Parties often worry that relationships can be damaged by following the contractual processes. But they may be far more damaged by a payment dispute.
It is likely that your contract will contain payment provisions. These will set out when and how you should submit applications for payment. Make sure you are following those provisions to the letter of the contract.
We have, on occasion, seen successful adjudications where sums have been awarded when parties have not strictly followed the contract. But do you want to add this element of risk and the potential for an adjudication? Clarity should ensure that such a scenario doesn’t arise in the first place.
Applications for payment often suffer from poor presentation. Pay attention to the detail, and you’ll be less likely to encounter problems.
Firstly, use the same language as in your contract. So, if your contract refers to ‘Interim Payment Application’ make sure that is written clearly across the top of the page. That way there can be no ambiguity.
Payment applications should make it clear that is a demand for money owed. State the contract value for the entire contract. Then make sure the application for payment is cumulative and deduct the previous amount that has been paid.
Follow the application for payment dates within the contract if known. Similarly, dates by which those applications must receive a response. It can be helpful to set up a calendar or diarise the necessary dates to ensure you don’t miss them.
Failure to submit applications on time might mean that your payment has not become due. If your contract is not clear when a payment becomes due or when is the final date for payment then legally the Housing Grants, Construction and Regeneration Act 1996 as amended (“Act”) steps in to ensure you have a suitable mechanism.
There is a reason we repeatedly emphasise the importance of not only records but good records. Provide evidence to support your application for payment. This might include instructions, a schedule of rates, quotes, an explanation of any variations, photographs, receipts, and supplier invoices.
If you are not able to provide all the supporting records, at the very least, provide a detailed commentary on why you are claiming the figures submitted. If doing so, try to keep language plain and clear. Stick to the facts and try not to overcomplicate things.
Unless the contract strictly requires invoices to be issued for payment, avoid issuing invoices. All too often invoices show only the net amount claimed rather than a cumulative sum less previous paid or due to be paid. As always, clarity is key. If a dispute arises, it’s crucial that you have been clear about what you have requested to be paid and what has already been paid.
If you follow these steps, you should be far more likely to receive payment for the work you’ve completed. However, if you find yourself struggling to get paid, get in touch with one of our team to see how we can support you.
The post Make Sure You Get Paid appeared first on Staging - Overford.
]]>The post Why subcontractors should never walk off-site when they are not getting paid appeared first on Staging - Overford.
]]>How can you engage your client if you are not being paid on-site? Is walking off-site an option?
In this new podcast, Guy joins Paul Hemming of C-Link for an episode of Own The Build.
The two debate the best strategies for both main and subcontractors when the subcontractor threatens to walk off-site due to payment. They discuss why subcontractors should never walk off-site and, instead, what they should do while at the same time looking at things from a main contractor’s perspective too.
Listen to the podcast below or stream the full episode on Apple, Spotify, and Google by searching ‘Own the build’
If you are struggling to get paid, get in touch to find out how we can support you or read more about out dispute avoidance services.
The post Why subcontractors should never walk off-site when they are not getting paid appeared first on Staging - Overford.
]]>The post Case Study – Contractors’ All Risk Claim appeared first on Staging - Overford.
]]>The $1 billion Midfield Terminal Building at Indianapolis International Airport, aimed to create a transport hub for the city. During the construction, a steel roof structure partially collapsed. The roof was being held by two shoring towers. Incorrect lifting and jacking operations by the steel erection sub-contractor were the cause of the collapse.
The collapse caused over $100 million of damage and associated loss and expense and delay costs. In addition, the incident necessitated in an immediate cessation of the entire work for several weeks. This led to the main contractor making an insurance claim.
We supported the insurance principle to appraise the extent of the delay and damage. This continued for the entirety of the required investigation and reinstatement of the damaged works.
As part of that work, we provided an experienced site team of surveyors, estimators, engineers, and planners. The team appraises the extent of the damage and tracked the project through the repair work. This involved completing a cost reconciliation of the contractor’s submissions.
Additionally, our team carried out a delay analysis across the whole project.
From there, we provided an assessment of the related delay costs from contractors and sub-contractors. We were also liaising with engineers on proposals for rectifications and agreeing on the final account relating to the insured peril/loss.
This project was particularly challenging. As can often happen in high-pressure environments, communication with the contractor broke down. The contractor was unwilling to take a productive role in the repairs. This meant extensive and time-consuming interactions. Ultimately, we ensured our client was protected from excessive and unrelated cost claims and delay damages.
Are you are looking for support on the management and assessment of claims? Download our insurance capability statement, or get in touch to find out how we can help you.
The post Case Study – Contractors’ All Risk Claim appeared first on Staging - Overford.
]]>The post Arbitration – An Introduction appeared first on Staging - Overford.
]]>The process involves the appointment (usually through the project contract) of an arbitrator. A dispute is resolved in a similar manner to a court, but the hearing is confidential and held in private with the arbitrator (or arbitrators), rather than in a public court.
Arbitration is old. Some would argue thousands of years old. It can certainly trace its origins to the 18th Century, and like most things in law, the early days of trade and the industrial revolution. The trusted source, ‘Wikipedia’, refers to arbitration being a feature of the ‘Jay Treaty’ of 1794, to tackle issues around the US / Canada border.
However, these days it’s used frequently in commercial disputes. It’s popular where parties want to keep their disagreements away from the courts but still resolve issues with a degree of certainty. The ‘New York Convention’ is often mentioned in relation to arbitration. That’s because the New York Convention of 1958 is actually called the, “Convention on the Recognition and Enforcement of Foreign Arbitral Awards”. 172 countries have signed up to this convention. In theory, this means that those countries will all enforce a decision made in a recognised arbitration.
Arbitration is private – this is one of the biggest selling features it has. Unlike court hearings, the outcome of arbitration will never be in the public domain unless there is a challenge to an arbitral award. This means that the costs, arguments, and outcomes will always remain private. This makes it very attractive to businesses for that reason. There is little risk of unpleasant headlines hitting the front pages of newspapers, etc.
It’s possible for parties to also select the ‘seat’ of their arbitration – where the decision is made. This has led to certain locations (such as London) being very popular for arbitration. Parties will look for a well-established legal system and a degree of ‘certainty’ or fairness in the arbitration process.
There are limited options for appeal, which means that upon reaching a decision, it will be final. And parties are able to select the arbitrator based on their skills, rather than risk having a judge appointed by a court. In many jurisdictions, judges may have little or no expertise in the field of the dispute.
However, compared to adjudication, the process is usually lengthier and more expensive and involves more parties. This can be off-putting to some, particularly those struggling to fund a legal dispute.
Enforcement can be a challenge. So you may have a satisfactory result in the process of arbitration. But then you might find that the local court, who have to enforce the award, may be unwilling to do so. There are certain scenarios under which courts are able to reject an arbitration decision. This tends to be a challenge in some international jurisdictions.
Some of the usual suspects will be there. Solicitors for each party, almost always, barristers (advocates) for each party, there are likely to be expert witnesses and witnesses of fact. Other consultants may also assist.
Most significantly, there will usually be an arbitrator or arbitrators. Often, there will be a panel of arbitrators. This is usually an odd number, to avoid issues where there is a difference in the opinion of one or more of the arbitrators. The arbitrator(s) will decide the outcome of the dispute.
This is a good question – isn’t it always?! Unlike adjudication, it is far harder to put a price of any sort on an arbitration. Much will depend on:
The ICC have a calculator for arbitrator costs here.
Law firm Reed Smith also recently published a similar calculator, which is available on an app (very 21st Century!).
Recent innovations in arbitration are often linked to attempts to reduce the cost and time taken in arbitrations. Certain bodies such as the RICS have looked to do this through the use of ‘fast track’ or ‘expedited’ arbitrations. The aim perhaps being to compete with adjudication, but retain a process more suited to larger disputes.
The use of arbitration should normally be cheaper than going to court, but that’s not guaranteed. The process is still much more expensive as a rule, than adjudication, but then adjudication is not designed to be used in the same way as arbitration. Arbitration is more suited to larger, final account disputes, rather than decisions that will keep a project moving and cash flowing.
As always, if you need help with resolving a dispute or tackling a difficult final account, get in touch today. We will be happy to help you with the best route forward.
The post Arbitration – An Introduction appeared first on Staging - Overford.
]]>