International Construction Law Review
ARE GLOBAL AND TOTAL COST CLAIMS STILL VIABLE?
Dr Franco Mastrandrea1
Chartered Quantity Surveyor and Chartered Arbitrator
I. INTRODUCTION
There appears to be growing commentary in social media, technical press and legal circles expressing an increasing disillusionment over the viability, or even validity, of global and/or total cost claims in construction. Thus, it is not unusual to see comments along the lines of “global/total cost claims are not worth the paper they are written on”. That, however, would be to ignore and belittle their historical importance and distinctive place in construction claims,2 even though for reasons explored, both managerial and technological advances and the conditions that attach to their use have led to a decline in the pursuit of such claims.
Take a common scenario: by reason of numerous separate changes, or delayed releases of information by or on behalf of the Employer under a traditional construction contract, the impact of each change or late release of information and their effects in terms of delay (whether project3 or localised4), disruption, etc., upon the Contractor is not easily measured. On what basis, then, is the Contractor to advance a valid claim in respect of those real, adverse, consequences or is it destined to abandon any thought of pursuing its grievances?5
1 LLB(Hons), MSc, PhD, FRICS, FCIArb, Barrister at Law.
2 It was suggested by MacAulay JA in Kytec Pty Ltd v Prolearn Corporation Pty Ltd [2024] VSCA 23 at paragraph 273 that “to the extent such a (global) claim has been recognised, it seems to be confined to a claim for damages for breach of a construction contract”.
There are, however, no special legal principles that mean that plaintiffs in “building cases” win or lose differently from plaintiffs in other classes of contractual case: Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184, per Leeming JA at paragraph 186.
3 Or sections, or phases, of the project that expose the Contractor to delay damages payable to the Employer where the Contractor is responsible for those delays, or which have prolongation cost consequences for the Contractor where the Contractor is not responsible for those delays.
4 That typically do not expose the Contractor to delay damages to the Employer, but do carry localised cost consequence for the Contractor.
For a consideration of such claims see Mastrandrea, F, “Localised Delays: The Poor Relation in Construction Claims?”, [2023] ICLR 112.
5 The issues will essentially be the same, as these sorts of issues cascade down the Contractual chain into subcontracts and supply contracts.
Pt 2] Are Global and Total Cost Claims Still Viable?
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