T017 Contract Practice - Loss & Expense Rics Apc

Front 1

What is loss and/or expense?

What are the relevant clauses in JCT DB11?

Back 1

Reimburses the contractor for direct loss and/or expense incurred in carrying out additional work or from an employer’s breach of contract

4.20 to 4.23

Front 2

What are the procedures for claiming loss and expense?

Back 2

As soon as a the regular progress of the work is affected, or is likely to be affected, or the contractor becomes aware of any other matter that would cause them to incur loss and expense, they should notify the architect in writing
He should submit any further information as requested by the architect/QS to enable the amount of loss and expense to be ascertained

Front 3

What are Relevant Matters, how many are there?

Back 3

The events that entitle the contractor to loss and/or expense, along with deferment of possession of the site.

There are 5 relevant matters set out in Clause 4.24:
1) Variations
2) Instructions
3) Execution of an approximate quantity that was not a reasonably accurate forecast of quantity
4) Suspension by the contractor for non-payment
5) Any impediment, prevention or default by the employer

Front 4

What is the key thing to remember when assessing loss and expense claims?

Back 4

It should be the ACTUAL loss incurred by the contractor

Front 5

What are the common heads of claim in loss and expense applications?

Back 5

Prolongation (extra site overheads i.e. preliminaries)
Thickening of preliminaries (e.g. extra supervision required due to variations)
Disruption (causing plant / labour to be underemployed – hard to prove)
Increases in labour / material costs during the period of delay
Head office overheads
Loss of profit (commonly combined with head office overheads)
Finance charges (i.e. interest)
Acceleration costs (NB Can't be instructed under JCT)
Claim preparation costs (NB Can't be instructed under JCT)

Front 6

How are head office overheads and loss of profit often calculated?

Back 6

Hudson, Emdem or Eichlaey formulae

What are the Hudson and Emdem formulas?

(Head Office overheads + profit) ÷ 100 x contract sum ÷ period in weeks x delay in weeks

Front 7

Once loss and expense is ascertained how is it added to the contract sum?

Back 7

Added to the contract sum immediately and paid in the next interim certificate

It is NOT subject to retention

Front 8

What is a global claim?

Why might you want to limit them?

Back 8

No attempt to separate out all of the difference causes and their effects. Lists a whole load of causes of delay / loss and expense and gives the overall effect

Difficult to prove or disprove them, the contractor is likely to end up with at least something, be it an EOT or loss and/or expense