Time is money and this statement is apt with construction projects. Largest construction disputes, those that are complex in terms of defense and prosecution, are claims that are related to either delay or time.
Although construction delay claims in UAE involve complex issues that are in relation to overlapping causes for delay as well as sophisticated scheduling, they’re contract claims at the core. It is, therefore, a claim based on a contract, especially if it is time-related.
Just like with all contract-based claims, starting points to the analysis are the contracts themselves. In this article, we will provide you with all the essential information regarding construction delay claims in UAE.
Types of Construction Delay Claims
In order to define the level of influence of certain construction delays, they are to be classified correctly.
Critical and non-critical construction delays
A critical construction delay is the type of delay that has an impact onto the construction project's completion date and other milestone dates on a construction project. A critical delay cannot be made up and they tack on additional time.
As for a non-critical delay, it affects specific activities’ completion. Unlike a critical delay, non-critical delays don’t have an impact on to date of important milestones such as the completion date. The determining factor would be if the delay will extend CPM or Critical Path Method of projects.
A CPM schedule sets out the timeline for the extended activities related to projects. They establish the lowest duration as to how long critical activities are going to be finished. Critical activities are to be performed at certain times as well as in particular order in order to let the other critical phases to get initiated. If delays are not going to impact the critical path of a project, then the delays would be classified as non-critical. They may involve simple or minor changes to correct the delays.
Excusable and inexcusable construction delays
As soon as you’ve determined the delays’ nature which may either be critical or not, it is then important to establish as to whether delays are inexcusable or not. If a delay is known to be excusable, then it is one which allows the head of the construction an extension to project completion or money as compensation.
Why? It is because the delay is not of the control of the contractor. A common excusable delay is to be outlined in the construction contract. Examples for delays that are excusable include when delays are caused by clauses included in contracts which remove liability for unavoidable and natural catastrophes. Excusable delays may also be from mistakes in plans or even minor concerns that are caused by construction project owners themselves.
Inexcusable delays are ones in which the contractors were the reason for the extension of projects. If that is the case for you, then the contractor that you have hired will be held accountable towards the expenses for damages that are caused by the construction delay. An inexcusable delay may result to failure in securing permit and caused by general poor planning, late submissions, or delayed mobilization.
Compensable and non-compensable construction delays
The last thing to see if a delay can be considered as compensable or not. If it’s compensable, it means the one that is affected by the construction delay will be given extensions or money from the delay of the work.
An excusable delay is compensable. This means every single time a delay has been labeled as excusable, a contractor to the project will have a claim may it be for compensation or time extension. There are also cases wherein the contractor is granted both extension and compensation. If the contractor has caused the delay, then the delay would be referred to as non-compensable. A non-compensable delay may fall under the other classifications, largely depending on the clauses in the agreement and on the specific situation.
Damages for delays
If the owner or client for the construction project is the one causing the construction delay, then the contractor hired by the owner can file a claim for:
- Supervisory expenses and costs for project management
- Loss of use
- Overhead
- Lost profits
- Loss of rents
- Insurance costs
- Construction loan interest
If the construction delay was caused by the contractor, it is important for a client or owner of the project to have a claim with regards to the following:
- Jobsite trailer rental costs
- Temporary utilities or facilities
- Extended general conditions
- Supervision costs
- Liability insurance
- Field labor
- Equipment rental and maintenance costs
- Lost productivity
- Increased material costs
- De or re mobilization
- Increase of the hourly labor rate
There may be more information that you need in understanding construction delay claims in UAE. However, the ones we mentioned in the article will help you understand them in a more structured manner. If you wish to know more regarding delays for construction projects and how to file a claim, talk to construction dispute lawyers in UAE. Click here for more info.
