Know your range before the first meeting
Work out your final account's best, worst and likely outcomes, head by head, before anyone negotiates. The range tells you which concessions are cheap and which are surrender, and it is your only defence against a confident round number from the other side.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
Why it matters
The first number said aloud in a settlement meeting anchors everything after it. If the other side says it first, and says it confidently, you start measuring every concession against their figure, not the merits. Without a worst case, you cannot tell when to walk out. Without a likely case, you cannot tell whether an offer is good. Without a best case, you cannot tell what you are giving away. Built head by head from the evidence, the range turns a contest of nerve into a comparison of numbers.
How to do it
- Write the best, worst and likely outcome for each head, with a sentence of reasoning for each.
- Add the heads to give the account's best, worst and likely totals.
- Decide, before the meeting, the figure below which you will not settle, and who has authority to change it.
- Mark which heads are cheap to concede and which are the value of the account.
- Take the range into the meeting and test every offer against it before responding.
Example
Illustrative example. The scenario and figures are invented.
The facts
A subcontractor's account is £310,000 above certified, and the main contractor has offered £150,000 to close everything. The subcontractor's surveyor builds a range across four heads before the meeting.
What happens
- Measured work: best £80,000, worst £60,000, likely £70,000, supported by an agreed remeasure.
- Variations: best £140,000, worst £90,000, likely £120,000, with three instructions contested.
- Loss and expense: best £70,000, worst £10,000, likely £35,000, with thin records for one period.
- Disputed contra-charges: best £20,000, worst nil, likely £15,000, no Pay Less Notice served.
Range by head
| Head | Worst | Likely |
|---|---|---|
| Measured work | £60,000 | £70,000 |
| Variations | £90,000 | £120,000 |
| Loss and expense | £10,000 | £35,000 |
| Contra-charges | £0 | £15,000 |
| Total | £160,000 | £240,000 |
The outcome
The £150,000 offer is below the worst case, so it is declined with reasons, head by head. The account settles at £225,000 after another 3 weeks, close to the likely figure.
To have this done for you, see our Final Account Claim service.