Claims Documentation, Validation, and Settlement Assistance
Whether
an organization is considering submitting a claim or defending a claim, the
first step is determining if a claim is legally defendable. Depending on the
size and complexity of the claim it may not be practical to turn the claim
over to an attorney. Basically there are four elements to a defendable
claim:
· Contract Formation
There must be a legally binding contract with the other party.
If the agreement has been properly written and executed this is especially
easy to prove. Most construction claims are based on alleged oral contracts
made that alter the written agreement. Without written agreement change
orders to the contrary, it must be proven that an enforceable oral (spoken)
contract was made or that an enforceable contract change can be implied from
the circumstances of the situation.
· Performance
Each party must prove that they did what was required under the
terms of the contract and that additional compensation claimed is based on
costs incurred because of circumstances beyond their control.
· Breach
The party making the claim must show that the other party failed
to meet their contractual obligations or did not provide enough information
about the circumstances for the claimant to properly price the work. If the
claim is based on poor quality, then this must be proven.
· Damages
The party making the claim must show that they suffered an
economic loss as a result of the other party’s breach of contract.
Determining the amount of damages is usually the most contested issue of a
construction claim. The party performing the work almost always prices the
additional work required at considerably more than the paying party thinks it
is worth.
C. A. Services can provide the following services to
assist a party in supporting their position:
· Preliminary Claims Analysis
This is required to determine actual damages, causes, and
potential recoveries. In addition, the analysis will address potential time
required, costs, success probability and strategies.
· Claim Preparation or Claim Defense Preparation
Whether submitting a claim or defending a claim, a comprehensive
document must be prepared to identify and substantiate all relevant issues in
all potential categories. This must be done in a concise and compelling
manner. Claims must be written in simple language, well organized, and
substantiated with accurate back-up documentation. The more thorough and
convincing a claim presentation or claim defense is, the more likely a
favorable resolution will occur. Activities required to complete either document
include, but are not limited to, the following:
· Contract
and Change Order Reviews
· Initial
Bid and Inquiry Review
· Schedule
Impact Analysis
· Delays and
Disruptions Analysis
· Productivity
Impact Analysis
· Estimating
the costs of having a 3rd party complete the contested work.
· Settlement
options
· Claims
Presentations
· Communications and Negotiations with the other Party
Many times persons close to disputes lose their perspective and
communications break down. Loss of productive communications between two
parties is the leading cause for claims going to lengthy and expensive
arbitration or litigation for settlement. C.A.
Services can typically open closed communication channels and restart
productive negotiations, as required, to avoid arbitration or litigation.
· Documentation and Execution of Settlement Agreements
Once a settlement is reached it is essential that a settlement
is documented and properly executed. All agreed upon work should be
completed as soon as possible and all amounts due should be paid as soon as
possible. Expedited completion and close out of settlement agreements reduce
the chances of additional issues surfacing that could void verbal agreements
not properly documented and executed.
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