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Do you have any problems with contracts, disputes with clients or other legal questions you want answered? Our regular legal Q&A can help provide the answers


We are working on a project that was in progress at the time of the extra royal wedding holiday. Should I apply for an extension of time? The royal wedding was a public holiday, not a bank holiday, and you may well be entitled to a day’s


extension in lieu. Both the JCT and NEC make provision for statutory intervention and, as it took an Act of Parliament to create the public holiday, this should provide sufficient grounds for an award. It is incumbent on the main contractor to review all the works and progress at the end of a project, and to confirm the completion date or award more time, if it is due. Failure to do so may mean ‘time’ goes at large, and the damages clause seeks to have efficacy. All you would then be required to do is to complete within a reasonable period of time. However, this would seem a little excessive for one day’s slippage. There is, of course, the contractual requirement to submit a notice of a day’s delay, and you may find that you will have had to do it nearer the event.


We have been called by the landlord to an empty shop unit whose electricity bill seems excessively high. When we arrived,


we walked into a hot house, full of what we assume to be cannabis plants. How should we handle it?


It is for circumstances such as these that you need adequate terms and conditions. When quoting daywork


jobs, establish how the hours of work will be recorded and agreed and have a caveat that states you will be fully reimbursed by the instructing authority for all your time and involvement with the job. Rates of pay can be quoted for workers, management and staff. Whilst on site you should get permission


from the owner to disconnect the power if it’s their side of main-board. Contact the supply authority if it’s the other side but, whatever you do, make sure no third party could injure themselves by any action you take. You may be asked to attend court, and the expenditure this puts you to can be chargeable to the client if, that is, you have phrased your terms


56 ECA Today September 2011


appropriately. In this event, the court will be asking you to justify your actions and to provide evidence as to what you found. As soon as practicable, file a written report on everything you find, what you did and, most importantly, why you did it. Take photographs. Seek immediate assistance from your


colleagues, and do not act alone. If you think it is appropriate, call the police and try not to tamper with any evidence. Finally, be prepared to leave signage behind, warning of any dangers of trying to re-energise the site without formal permission from the landlord.


We have been asked to show the ‘float’ on our suggested programme. Why would the customer ask this of us if we have agreed to meet his


completion date? Float, or the ownership of it, is always a vexatious issue especially when someone has to consider for


how long to award an extension of time. For certain neutral events, the project may have call on the float if it is delayed through no single party’s fault. Some float may have been added to allow the contractor some slippage where he knows his risk of failure is most acute. The NEC even allows contractors ‘time risk allowances’, which is the float added to a critical duration activity where a number of external influences may cause delay. In this situation, the contractor ‘owns’ the float, as he owns the risk. Most commentators say the float ‘belongs’ to whoever gets to it first – although a judge has noted that this could cause unfairness to the contractor, in the event the employer uses the float which, if they had used it themselves, may have mitigated the contractor’s exposure to delay damages. To properly identify the extent of the project


float, it is necessary to undertake a critical path analysis using a network programming technique. By hand, this is a timely exercise, and one not easily undertaken. Computer programs have been developed to help but these, too, are sophisticated pieces of kit, which explains why contractors employ ‘programmers’ to assist the production staff. They can help with both the interpretation


of the programme and consequently the timely delivery of the works Keep an eye on any event that may have a negative impact on your progress, and put the customer on formal notice of each and every delay. If your programming is so sophisticated that you are able to monitor how the float is being used, and you find the expenditure of float time is being inequitably used by the professional team, then apply for an extension of time to redress the balance.


A number of my clients send me their collateral warranty at the end of the project, expecting me to ‘just sign and return it’. Surely, for all the


obligations I am undertaking, I should be paid extra – but if I am, how much can I charge? You are pricing the risk the warranty imposes, often for a 12-year period. How do you price risk? Often it is an


unidentified sum that is included in the ‘profit’ percentage. If this was identified as ‘contribution towards, risk, overheads, and profit’, then contractors may become more expert at risk identification, pricing and overt management. As it is, we continue to trust to luck. Insurers have the information gleaned from


thousands of claims to put a value on their risk, and in the event that the employer fails to get any warranties from the construction team, they may have to procure an ‘inherent defects insurance’ that will be proportionate to the overall value of the scheme. What would the premium value look like if it was assessed on one per cent of one per cent of the total cost of the scheme? Contractors will have to pay to have the warrantee assessed for its acceptability, apportion the value of the professional indemnity insurance over its design and build turnover for 12 years (here the accountant can do a ‘net present value’ appraisal calculation to indicate what charge this warranty should carry), and a judgement can be made on the increased risk the warranty seeks to impose. Having costed the potential for a claim under any one of the warranties clauses, an assessment of the likelihood of a claim occurring needs to be made. It is worth spending a day on this exercise, just to gauge


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