Are Global Claims Permissible?
During project execution claims management (change/variation order management) seldom receives the focus it should and project documentation is usually far from perfect. When the project comes to an end contractor usually find themselves struggling with cash flow problems and cost overruns caused by delay and disruption events. Contractor trying to get late claims accepted face two problems. First, a claim must be timely and it mist be properly substantiated. Bringing in a claim 6 month after the delay event occurred is usually difficult. Contractors therefore often resort to a Global Claim.
So, what exactly is a Global Claim? While there are numerous definitions of what represents a global claim, the SCL Delay and Disruption Protocol (2002, p. 56) defines a global claim in the following way:
“A global claim is one in which the Contractor seeks compensation for a group of Employer Risk Events but does not or cannot demonstrate a direct link between the loss incurred and the individual employer Risk events.”
A Global Claim is a permissible vehicle for a contractor to get compensated for additional time and cost in case of proving actual entitlement the traditional way is impossible. I have taken a look at the recent case of Walter Lilly v Mackay in which Judge Akenhead extensively commented on Global Claims. This case made clear that, if condition precedence is complied with, there is a place for global claims even if cause and effect are difficult or impossible to establish. Essentially, contractors are being given a cautious green light to advance global claims if they comply with the qualifications set out by Judge Akenhead. But if a claimant aims for a successful global claim, proving the entitlement on the balance of probabilities and, if possible, the nexus between loss and cause is still a burden the contractor has to fulfill.
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