A consideration of recovery of prolongation costs in a construction context

Abstract

Purpose

The purpose of this paper is to review the principles for valuation and proof of contractor's claims for additional site overheads arising from delays to completion of construction projects.

Design/methodology/approach

An overview of prolongation costs and established principles for recovery is provided. Aspects of recent decisions are analysed critically with respect to proof of delay claims, site overheads and claims for winter working losses. Findings are compared with the established principles.

Findings

Some statements in the judgment in Costain v. Haswell [2010] TCLR 1 with respect to requirements for proof of delay claims and for recovery of site overheads depart from established principles. Other elements of the judgment confirm existing principles. The need to distinguish between time‐ and volume‐related costs emerges as critical in valuation of delay‐related losses.

Practical implications

The need for a claimant to establish proof of delays to completion, and proof of loss, particularly in professional negligence claims, is emphasised. The consequences of failing to establish proof are noted as extending potentially to loss of the entire claim.

Originality/value

The paper will help construction practitioners, academics and lawyers understand the potentially far‐reaching impact of the principles advocated in recent case law.

Citation

Champion, R. (2011), "A consideration of recovery of prolongation costs in a construction context", International Journal of Law in the Built Environment, Vol. 3 No. 3, pp. 237-251. https://doi.org/10.1108/17561451111178443