The article is aimed to help you get through the phases for improved understanding to comply with all essential requirements of claims resolution. Keep reading the article!
Essential Claim Management Stages in the Construction Industry
Nevertheless, the construction industry is incredibly complicated, owing to the presence of uncertainties and risks. Therefore, the management of claims is inevitable for accomplishing the projects as per the desired outcomes successfully.
However, disputes can occur all of a sudden, creating a panic situation for the contracting parties. The situation can be handled with the help of complying with the phases of claims management in construction. Let’s consider the detail below:
Phase Zero: Proactive Approach
You surely have heard that prevention is better than the cure. It is beneficial for every involved party to avoid claims as much as possible. So, when you are working in the industry of construction and building, you should adopt proactiveness at every step.
Interestingly, when contractors start with a positive approach towards resolving disputes, they can get better results. It is evident from the fact that contractors and owners equally prefer hiring experienced construction claims consultants Dubai based services from the very initial phase of the project. This decision helps them formulate contracts in the best way possible, along with post-construction claims avoidance. Ultimately, success is destiny!
Phase One: Pre Tender
It is a step of a construction project when the initial concept building is done for the respective project. The contract document is designed during this stage when all prospective parties plan for a mutual agreement to get into a project. Clarity is prerequisite at this point to build a level of confidence among the people.
Additionally, in-depth knowledge of defining the fundamental elements of tender documents can help the individuals to get through the process without creating any disputing issue. A few tips for managing claims at this stage are as given:
- Perform assessment of the project scope to satisfy the underline purpose of the construction
- Distribute the requirements according to the priority for an improved response for project management.
- Consider the construction scheme of the project comprehensively to eliminate risks for improved trust-building among the shareholders.
Phase Two: Contract Formulation
The majority of claim conditions are directly associated with the formulation of the contract documents. Therefore, the contracting parties should pay critical attention to the clauses added in the contract for managing the claims before occurrence. There is no denying that contact formulation helps the construction experts to prevent the risks of claims in construction projects. Here are given a few essential tips to get through the process:
- Define a comprehensive methodology for identifying the scope of the project to ensure economic exchange for all contracting parties.
- Share the contract clauses in detail to ensure comprehensive information of the projects for improved understanding of associated risks.
- Follow the standardized format for writing contact clauses and get all documents signed from potential contracting parties.
Phase Three: Construction
The activities carried out in the construction industry are usually intricate in nature. For example, the builders have to plan the construction processes in a proper sequence while following the architectural guidelines. For this, suitable conditions cannot be achieved in all cases owing to various internal and external factors. The influencers can potentially derail the projects during this phase that can result in a potential dispute. The best way to avoid claim during the construction process is to follow the give:
- Pay greater attention to plan the project wisely after determining all essential factors that can influence the construction.
- Along with this, the contractors should consider devising comprehensive plans to ensure the deal with uncertain situations during the building process – have a plan B.
- It is imperative to have a proper risk management plan in hand while considering all resources and limitations in mind.
- Keep the probability of disputes in mind while you are going to sign a contract for a construction project. Consider potential ways to handle the claims with utmost dedication and will to resolve disputes.
Phase Four: Post Construction
It is a phase when the project is delivering, but the contractor is responsible for post-construction damages. The owners can make claims in case any issue occurs after project completion. The stage is most critical in its nature because it shows the quality of material used in the construction work. The post-construction claims are generally related to the rights of request for compensation if the work is not done as per the requirements. It is imperative to understand that claim identification and quantification is accomplished at this stage of management. So, effective ways to mitigate the risks can be:
- Consider the baseline of the contract to justify the rights of claim-making and requesting for compensation.
- Focus more on the systematic approach towards claim management by adopting different methodologies of dispute identification and resolution.
- Rely on the scope of the project to describe the disputes in detail for strengthening the claim through proper evidence.
- Add the description of extra-work required or done to manage the claim peacefully for this; you should record all hold-ups and potential delays that caused project disruption or other damages.
- It is imperative to take assistance from construction claims consultants Dubai based companies to ensure proper quantification of claims to understand the gravity of the problem.
- Consider mitigating the claims with the help of expert judgment in the form of negotiations, arbitrations, or litigation in construction claims.
Final Thought on Claims Management Phases
To sum up, the management of claims should come into play much earlier than the occurrence of disputes. The potential contracting parties should consider it even before signing the contract. In this way, an approach towards mitigation of disputes increases the probability of success.
Don’t forget to adopt a progressive mindset while getting into the industry of construction because you have to deal with hurdles while achieving the end goals!