Claims and Disputes

Claims and disputes describes both the formal assertion by a contractor or employer of a contractual entitlement to additional time, payment, or other remedy, and the structured escalation process by which unresolved claims become disputes referred to a third party for determination.

What is Claims and Disputes?

Under FIDIC and standard MDB contract forms, a claim is a contractor's (or employer's) assertion that it is entitled to an extension of time, additional payment, or both, based on a specific contractual provision such as employer-caused delay, unforeseen conditions, or a valid variation-order that was not priced on time. A claim becomes a dispute when the engineer or employer's representative issues a determination that the claiming party does not accept, or when no determination is issued within the prescribed period. The FIDIC 2017 suite reformed this process significantly: both contractor and employer must give notice of a claim within 28 days of becoming aware of the event, with fully detailed particulars submitted within 84 days, or the entitlement may be time-barred.

Unresolved disputes escalate through a defined hierarchy. Under FIDIC Red Book, the first tier is referral to the dispute-adjudication-board (DAB), whose decision is binding pending final resolution. If a party is dissatisfied with the DAB decision, it issues a notice of dissatisfaction and may refer the matter to arbitration. This structure is designed to keep most commercial disagreements resolved at contract level before reaching formal arbitration proceedings.

Why Claims and Disputes matters for bidders

Contract claims are not a last resort: they are a routine commercial tool for contractors managing risk on complex projects. The discipline is to identify events that trigger entitlements early, give notice within the contractual time limit, and maintain complete contemporary records. Records created after the fact are systematically less persuasive in any formal proceedings. Build a claims register alongside your variation register; treat the two as companion documents. If a dispute does arise, the quality of your contemporaneous records, site diaries, correspondence, programme updates, and cost records, will determine how far your position is supported by evidence rather than assertion.

FAQ

What is the notice period for claims under FIDIC 2017?

A party must give notice of a claim within 28 days of becoming aware of the event or circumstance giving rise to the claim, with full particulars submitted within 84 days. Failure to give timely notice may result in the entitlement being forfeited.

What is the difference between a claim and a variation?

A variation-order is an employer-initiated change to scope; a claim is the contractor's assertion of entitlement arising from a specific event or circumstance, including unforeseen conditions or employer default.

Must the contractor continue work while a dispute is being resolved?

Yes. Under FIDIC and most standard forms, the contractor must continue performing the contract pending resolution of any claim or dispute, unless the engineer certifies that work should stop.