Episode 48 - Loss & Expense Claims

Loss and expense claims in construction contracts require contractors to provide robust evidence of financial impact, including site overheads, profit loss, inflation, and productivity disruption. Formulaic calculations often fail to satisfy legal standards, making meticulous record-keeping and clear documentation of employer-caused delays essential for successful reimbursement. Negotiation remains the most effective dispute resolution strategy, prioritizing cost-efficiency and the preservation of professional relationships over lengthy litigation. When a contractor faces insolvency, architects must demonstrate that they exercised reasonable skill and care during the initial selection process by conducting thorough due diligence, such as reviewing financial audits and project history. Ultimately, protecting clients from such risks involves maintaining transparent communication, verifying contractor stability, and ensuring appropriate insurance coverage is in place to mitigate potential losses from unforeseen project interruptions.