They say it isn't a compensation event
We notified the event in time, and the reply came back that it is not a compensation event, with no quotation instructed.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
What's happening?
Your main contractor's reply to a notification can decide an event before any money is discussed. The contract only lets it refuse on the grounds it lists. Examples are that the event came from your own fault, had no effect on cost or time, or is not one of the compensation events the contract names.
Each ground is tested differently. A fault argument turns on the Accepted Programme and the records of what happened. A no-effect argument turns on the cost records. A not-listed argument turns on the exact wording of the clause and your amendments. A reply that gives no ground, or a ground the contract does not recognise, is not a decision on the event.
The reply often arrives as a single line, and a single line is easy to accept by default. Leave it unanswered and the event can reach the final account at nil.
The solution
Read the reply against the grounds your subcontract actually allows. Then answer the ground given with the records that meet it: the clause the event falls under, the Accepted Programme, the diary and the cost. Compensation Event Claim rates each refused event on that evidence and presses the strong ones, answering in writing and in time.
Where no reply came at all, notify the failure to reply. If the silence continues for the further period, the event is treated as accepted. Compensation Event Loss Prevention builds that step into the routine, with a diary date for every reply period, so a silent main contractor cannot leave an event hanging.
Example
Illustrative example. The scenario and figures are invented.
The facts
A piling subcontractor notifies that the working platform the main contractor was to provide was not ready on the Accepted Programme date. It names the compensation event it believes applies. The reply says it is not a compensation event, because the delay came from the subcontractor's own late mobilisation.
What happens
- The reply is read against the grounds the subcontract allows. It relies on fault, so the answer turns on who was late.
- The Accepted Programme shows the platform due on the 4th. The rig's delivery ticket and the diary show the rig on site on the 3rd, and photographs dated the 4th show the platform still being trimmed.
- The answer goes back through the contract's communication system within the week. It sets out the programme date, the delivery ticket and the photographs, and asks for the event to be accepted and a quotation instructed.
- The main contractor accepts the event and instructs a quotation. Six days of rig standing at £2,800 a day, £16,800, are quoted from the hire records.
The outcome
The event is implemented at £16,800 plus the Fee, against a first reply that would have left it at nil.