What does a loss and expense claim look like?
A loss and expense claim is a priced schedule of the extra cost an event caused you, with each head tied to its records.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
Loss and expense means direct cost you would not have had without the event, such as standing time or extra weeks on site. A claim that holds up usually has five parts. First comes the event, and the clause in your subcontract that pays for it. Second is the notice you gave, and when. Third is the period and the work affected, taken from an extension of time granted or a delay report. Fourth are the heads of claim, such as prolongation, disruption, acceleration, head office overheads and financing, each priced on its own. Fifth are the records behind every figure: payroll, hire invoices, allocation sheets and the site diary. Each head is built from what was actually spent, not from tender allowances or a percentage. Anything already paid in a variation comes off, so nothing is claimed twice. RICS's own guidance on ascertaining loss and expense works the same way, and your main contractor's surveyor will check each line. We do the money side. The period comes from whoever assesses time.
Example
Illustrative example. The scenario and figures are invented.
The facts
A drylining subcontractor is held up for 4 weeks when two floors are handed over late. The main contractor has granted a 4-week extension of time, and the subcontract has a loss and expense clause.
What happens
- The claim opens with the late handover, the clause it falls under and the notice sent in the first week.
- Prolongation comes from payroll and hire invoices: the supervisor for 4 weeks at £1,050, £4,200, and the cabin and welfare hire, £1,600.
- Disruption comes from the allocation sheets: 240 extra labour hours on floors worked out of sequence, at £30 an hour, £7,200.
- Head office overheads are £2,400 of director time spent on the delay, taken from diaries at cost.
- A £900 credit comes off for scaffold hire already paid in a variation.
The claim in figures
| Head | Amount |
|---|---|
| Supervisor, 4 weeks at £1,050 | £4,200 |
| Cabin and welfare hire | £1,600 |
| Disruption, 240 hours at £30 | £7,200 |
| Director time on the delay | £2,400 |
| Less scaffold hire paid in a variation | £900 |
| Claim | £14,500 |
The outcome
The claim goes in at £14,500, each line tied to its record. The main contractor's surveyor agrees £12,100 and leaves the £2,400 of director time to be argued from the diaries.
To have the claim built and pursued for you, see our Delay & Disruption Claim service.