Head office overheads: definition and example
The cost of running your business, such as offices and staff, that a delay can leave unrecovered.
By Jack Butler-Kettle · Updated
Guidance for England and Wales. Check the contract, amendments and facts that apply to your job.
What it means in practice
Read this alongside SCL Delay and Disruption Protocol and Walter Lilly & Company Ltd v Mackay [2012] EWHC 1773 (TCC).
These are business-wide costs such as central administration, office facilities and management. They differ from project preliminaries. A delay may affect recovery of those costs, but a formula result does not prove entitlement, causation or actual loss, and overlapping recovery must be avoided.
Support the claimed loss with accounts and evidence of the delay's effect. Delay and disruption recovery can help organise the financial evidence alongside the contractual basis.
Worked example
The facts
A subcontractor uses a calculator to explore the effect of an extended project on overhead recovery.
What happens
It checks the financial inputs against its accounts and the period against project records.
It considers whether those costs have already been recovered through another payment.
What this shows
The calculation is an analytical aid, not evidence that the other party owes the displayed amount.
Sources
- Delay and Disruption Protocol, 2nd edition, February 2017. Society of Construction Law.
- Walter Lilly & Company Ltd v Mackay & Anor [2012] EWHC 1773 (TCC) (High Court, Technology and Construction Court, 11 July 2012). The National Archives, Find Case Law.