DISPUTE
CLAIM
CONFLICT
CLAIM MANAGEMENT

COMMON ACRONYMS
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COMMON STANDARDS OF PRACTICE

1. A Guide to the Project Management Body of Knowledge (PMBOK Guide)
2. Executed/ Signed Contract between parties

DEFINITION
It is important to define the related terms, causes, impacts, effects, conflicts, and disputes, along with the definition of claims;

A Cause is defined as the source of, or reason for, an event or action; that produces effects, a result. Something happens (a cause), creates an impact/ influences and leads to an effect/ result.

An Impact is defined as a significant or strong influence. The word impact is used in the sense of ‘influence’.

An Effect refers to the result or the consequence of an action/ casue. The word ‘effect’ is used in the sense of ‘result’ or 'çonsequence'.

A Conflict is defined as a clash, an argument, between parties arising out of a difference in thought process, attitudes, understanding, interests, requirements and even sometimes perceptions. Conflicts are unavoidable due to the complexity of construction contracts and huge differences in interests among the participants to a construction project. A conflict is not always a bad thing. The constructive resolution of conflict can produce high quality decisions, encourage growth and strengthen teams and individuals involved. If conflicts are not resolved, they might lead to claims. While Conflicts are mainly handled by on-site Construction Management teams, Claims are handled by on-site Project Management teams.

A Claim is an assertion of a right; a demand for something as due. It is an action by one party of a contract against the other for damages resulting from the malfeasance of the other which violated their legally binding contract. Within the construction industry, the word ‘claim’ is commonly used to describe any application by the contractor for payment which arises other than under the ordinary contract payment provisions or a request for compensation for damages incurred by any party to a contract which was not anticipated in the terms and conditions of the original contract. A claim needs to be assessed and established, because while one party might say that something has happened or will happen in a certain way, the other party may not agree to it. Hence a claim can be proven right or wrong, and if proven right will result in a compensation from the wrong-doer. A claim must be submitted formally with relevant proof attached.

A Dispute is a situation where two parties differ in the assertion of their contractual rights. A Dispute is a disagreement between the parties that cannot be resolved by on-site Project Managers. A dispute may also occur if a claim made by one party was rejected by the other party, but the claiming party did not agree with the reasons given for rejection. A dispute shall be deemed to arise when one party serves a Dispute Notice in writing describing the nature of the dispute.

CLASSIFICATION
Calims can be of various types, such as;

1. Claim of Fact: Asserts that a condition has existed, exists, or will exist. Such a cliam requires support in the shape of evidence that is factual, sufficient, reliable, and appropriate.
2. Claim of Definition: Claim depends on the definition of one term. Who decides what is the correct definition of a term. How something is defined can have a huge bearing on how an issue is handled.
3. Claims of value: To claim that one thing is better than the othe.
4. Claims of policy: This is a claim to solve a problem in an organisational way
5. Claims of cause and effect: This is a claim to relate causes to an effect or an instance.

Impacts lead to Conflicts, Claims and Disputes. The most known impacts are as follows;

1. Delay
1. Excusable Delay
1. Excusable Non-Compensable Delay: Contractor and the Client, both have no control over them, and neither have caused them, and both are impacted by the delay. No damages are allowed, and only time extensions are allowed if the critcal path is at risk.
2. Excusable Compensable Delay: Contractor has no control over them and are not caused by Contractor's actions or inactions. This Delay is caused by the Client. Damages and time extensions are both allowed.
2. Non-Excusable Delay
1. Non-Excusable Non-Compensable Delay: Contractor (or the subcontractor under the contractor) had full control over them and are caused by Contractor's actions or inactions. Neither time extensions nor damages are warranted. This delay entitles the Client to recover delay damages.
3. Concurrent Delay
1. Contractor caused concurrent delays
1. True Concurrency: Where the delay events caused by the Contractor occur at the same time and cause a delay to progress on the critical path for the same period, at the same start and finish dates, either of which, in the absence of the other, is likely to cause the same delay to the critical path. This is highly unlikely to occur.
2. Overlapping Concurrency: Where multiple delay events caused by the contractor occur at different times but overlap for some period of time, and cause a delay to progress on the critical path.
3. Non-Concurrent: Where multiple delay events caused by the contractor occur at different times and do not overlap at all, and cause a delay to progress on the critical path.
2. Contractor and Client caused concurrent delays
1. True Concurrency: Where the delay events caused by the Client and Contractor occur at the same time and cause a delay to progress on the critical path for the same period, sharing the same start and finish dates, either of which, in the absence of the other, is likely to cause the same delay to the critical path. This is highly unlikely to occur.
2. Overlapping Concurrency: Where the delay events caused by the Client and contractor occur at different times but overlap for some period of time, and cause a delay to progress on the critical path.
3. Non-Concurrent: Where multiple delay events caused by Client and Contractor occur at different times and do not overlap at all, and cause a delay to progress on the critical path.
4. Path Delay
1. Critical Path Delay
2. Non-Critical Path Delay
2. Disruption
1. It is a change, a disturbance, hindrance or interruption to a Contractor’s normal working methods, means, approved schedules, resulting in lower efficiency and hence resulting in losses. Only, if the disruption is caused by the Client, the Contractor may have grounds to claim for damages. Proving disruption is not easy as proving delays. It is often difficult to detect disruption before it occurs. Disrution may or may not casue delay to the progress on the critical path, but does warrant claiming for losses. To prove disruption, the Contractor has to prove the following;
1. The progress has been disrupted
2. Additional costs were incurred due to the disruption
3. Disruption was caused by the Client
4. Which activity was disrupted
5. Which trade was disrupted
6. The cause of disruption constitutes a breach of contract
3. Acceleration
1. It occurs when the Client directs the Contractor to complete the project or a certian acitivty in the project before its competion time on the agreed/ approved schedule. Contractor incurs extra costs for adding unplanned resources. There are two types, such as;
1. Directed
2. Constructive
4. Right to Finish Early
1. The Contractor has the right to finish early and stop spending on preliminaries and resources etc. The Contractor has the right to maximise profits. If Contractor proves that the Client's actions refrained the Contractor from finishing early, the Contractor may claim delay damages from the early anticipated/ finish date till the contracted completion date.

WHY
A prerequisite to recognizing and remedying problems and avoiding claims on the construction project is understanding the causes, impacts and effects. Most common casues for claims are because of the most common ill practices prevailing in the industry, some of which are listed below;

1. Contractor Practices
1. Inadequate investigation before bidding
2. Inadequate market research before bidding
3. Estimating wrong equipment for execution
4. Estimating wrong delivery times
5. Optimistic bidding
6. Not following procedures and guidelines
7. Sub-Standard Construction due to unskilled labor
8. Slow progress due to insufficient resources
9. Errors in Design for design build/ turnkey projects
2. Client Practices
1. Inadequate scope definition/ bid information
2. Incorrect selection of bidders
3. Inadequate time allowed for bid preparation
4. Inadequate preliminary studies
5. Delays in meeting Client side obligations
6. Changes in approach and strategies during construction
7. Changes in scope/ specifications during construction
8. Errors in designs or as-built provided by the Client
9. Incomplete designs provided by the client
10. Delays in Taking over the project, OR even when the contractors wants to accelerate and handover earlier than the completion date
11. Causing disruption to Contractors approved schedule, by changing priorities during construction. This may not cause delays but may add costs.
12. Forcing the contractor to mobilise and demobilise against the approved plan, sometimes this happens repeatedly on a single project
13. Dictating contractor's schedule when no delays are imminent
14. Enforcing client preferred means and methods
15. Ambiguous terms or conflicting terms in the contract
16. Attitude and style of contract administrators towards contractors
17. Forcing Contractor in to standby times
18. Directing Contractor to complete work or an activity before the approved plan
19. Forcing Contractor to complete work early even when the Contractor is entitled to extra time.
3. Excusable Causes allowing Delay Compensation Only
1. Force Meajure
2. Climate
3. Unforeseeable below ground conditions
4. Unprovoked Strikes
4. Excusable Causes allowing Monetary and Delay Compensation
1. Delays in providing land use permits
2. Delays in providing Notice to Proceed
3. Delays in client provided materials or equipment
4. Cumulative impact of excessive changes/ variations

WHEN
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HOW
It is important to believe that Conflicts can be avoided, Claims can be managed, and Disputes can be resolved.

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