Blue Flower

Construction disputes are an inevitable aspect of construction projects and require extensive research of facts and figures to determine what may have caused the event. Also the costs involved and how each cost may have been impacted also remains a critical aspect which allows the calculation of delay claims.

As the UAE expands with the inclusion of growing industries and the commercial sphere, more and more construction projects can be seen, changing the landscape of the region.  Expert witnesses are more in demand than ever, to resolve any disputes that arise within construction projects.

Due to long term partnerships of parties and plans to work together, dispute resolution remains the most suitable situation in the case of an issue. The courts must do their due diligence, however, and who better to hire than the best quantum expert in the industry!

The best people for the job are well experienced and knowledgeable about the critical nature of claims and the different costs involved. The best witnesses in the industry have sufficient experience and knowledge to understand the critical nature of the claims and the costs involved in their calculation.

How Expert Witnesses Calculate Losses And The Costs Involved

The calculation of losses remains an essential aspect of any delay claims. But more importantly it’s critical to identify the types of expenses that are involved as they help in the determination of the amount of losses caused.

Quantifying Losses In Arbitrations

Quantified losses are calculated based upon a comparison of the planned and actual outcome. This dynamics of quantification will remain the same regardless of the source of costs, revenue, or profits.

The main concern for the arbitral tribunal is to understand the evaluation and the calculations that have been chosen by the experts should be explained in detail by the expert.  

The expert may decide on an alternate methodology, different form the opposing party. In that case it helps to identify the different methodologies in front of the tribunal. It's essential for the arbitration tribunal to know why experts have chosen a specific methodology

Experienced arbitrators may object and feel annoyed at the lack of explanations for the use of different methodologies used and also any ambiguity related to them.

Sometimes, the divergence value between the losses calculated may be significant and it becomes essential to identify the components that may have resulted in the variation. The components include a distinct, identifiable difference in the approach used by the experts.

The variance analysis can be used by the arbitration tribunal, to determine which aspects need to be argued upon. Arbitration tribunals can use this tool to increase the efficiency of their deliberations.

The Multifaceted Construction Costs

Other than document management, experts deal with challenges that are posed due to the costs involved in calculations. The following represents a brief description of the costs involved in construction:

1) Project Overheads

The term defines the costs which can be attributed to claim events but not directly to a specific contract task or item. Regardless they are incurred when providing critical functions in support of the project.  The costs included here, need to have a rational basis.

2) Staff Costs

Any additional staff costs that are a direct consequence of the claim event being addressed.

3)  Direct Costs

The term defines all costs that can be credited to a claim event. It requires accurate identification of any extra costs as over and above the project plan and an attribute of the specific claim event.

4)  Head Office Overheads

Any rational and reasonable basis presented for the allocation of the head office overheads owing to the claim event.

5) Profit Margins

It describes any net profit that would have been earned in the case of completion of the project.    

Usually, quantum experts will be advised by contractors and counsels regarding the costs which were affected as a result of the delay event.

The most well versed expert witnesses have the ability to recognize that owing to the right, extensive project knowledge contractors provide clear views on costs impacted. Although the extent may be determined gradually, the type of costs impacted can be determined.

Conclusion

The complicated nature of the construction claims of the many stages involved, the numerous aspects of the process, it's essential to have the best people working for you. Opt for the best, quantum experts, well versed in their respective fields to provide you with the best services for your dispute resolution for your delay claims.