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My fluctuations claim was refused because I didn't give notice

The subcontract had a fluctuations clause, we claimed the rises at the final account, and the main contractor says the notices were never given.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

What's happening?

Some fluctuations clauses make notice a condition of being paid. The JCT options that adjust for the cost of labour, materials, taxes and levies, rather than by formula, work this way. You must give written notice of each qualifying rise within a reasonable time. Formula and index-based clauses usually work differently, adjusting each valuation without a notice for each rise.

Where the condition applies and no notice was given, the rise may not be paid however well you prove it. But the refusal is not always the end. A notice may have gone in a form nobody recognised: a letter enclosing a supplier's increase, an application line with its build-up, or meeting minutes. The condition may not cover every part of the claim. And your main contractor may have used the wrong base date or method on the parts it did accept.

The solution

Read the notice condition exactly as written. Then search your letters, applications and meeting minutes for anything that meets it, rise by rise. Separate the rises that were properly notified, or fall outside the condition, from those that cannot now be saved. Recompute the ones that survive by the clause's own method, from its base date.

Price Rise Claim does that search and rates each rise for its notice and cost evidence. We recompute what survives, check it against the account, and submit it, or take it to adjudication, a fast independent decision, where the sum justifies it. The Handover Pack we leave you prices what the missing notices cost. Price Rise Loss Prevention then puts the clause's notice rule in your job diary, so the next rise is notified in time.

Example

Illustrative example. The scenario and figures are invented.

The facts

An electrical subcontractor's JCT subcontract carries the labour and materials fluctuations option. At the final account it claims £36,000 of rises: £21,500 on cable, £9,800 on labour after the industry wage agreement rose, and £4,700 on other materials. The main contractor refuses all of it, saying no notices were given.

What happens

  1. The correspondence file turns up two letters to the main contractor's quantity surveyor. Each enclosed the cable supplier's increase notice and went within 3 weeks of the rise.
  2. The labour rise was raised in an application's covering letter 5 weeks after it took effect.
  3. Nothing can be found for the other materials, and that head is conceded.
  4. The cable head is recomputed against the list of basic prices and the invoices, and the two letters are put forward as the notices.

The claim in figures

HeadClaimedAgreed
Cable£21,500£21,500
Labour£9,800£6,000
Other materials£4,700£0
Total£36,000£27,500

The outcome

The main contractor accepts the cable letters as notices. It settles labour at £6,000, arguing the covering letter was late. £27,500 is agreed on a claim first refused outright.