The lesson: keep detailed records
by Steven Hunt
 
Steven Hunt, senior legal counsel, Nakheel, stresses the need for contractors to maintain up-to-date site records to back up claims.


 Probably the greatest hurdle to the successful and timely resolution of claims brought by a contractor is the adequacy of its records, which enable it to properly substantiate its entitlement.
 
Nakheel is not unlike many other large corporations; expenditure is tightly regulated and decisions that have a financial consequence are subject to internal scrutiny and have to be justified.
 
Ascon-v-Alfred McAlpine was not won, as you might expect, because of clever legal argument and analysis; success was based, as many delay and disruption disputes are, on the strength of the primary records.
The importance of accurate and comprehensive records can not be overstated. I was fortunate enough to act for the successful party in the matter of Ascon-v-Alfred Alpine. The case has been reported in the law reports in England and is often cited in other judgments and articles because it is considered to represent current thinking on a number of delay and disruption principles including the ownership of float and the mitigation of delay.
 
My abiding memory of that case was spending the best part of two days on a wet and cold Isle of Man rummaging through large lorry containers full of randomly “filed” project documents searching for anything which might allow us to map out the progress of the works. Despite the conditions in which the records had been kept, I was able to track down some useful material, including the main contractor’s daily reports and site diaries. At the time, I could not have imagined how important these would turn out to be. During the course of the trial, the judge invited the parties to produce a schedule which would allow for a comparison of the parties’ primary records relating to the progress of the works at any particular point in time. Ascon-v-Alfred McAlpine was not won, as you might expect, because of clever legal argument and analysis; success was based, as many delay and disruption disputes are, on the strength of the primary records.
 
The distinction between primary records and secondary records is an important one. What we find at Nakheel is that, all too often, a contractor will substantiate its entitlement by reference to claims correspondence or minutes of meetings – the intent of which is usually to advance some “clever” legal or contractual position – when what is really needed is a first-hand account of what has gone on. These types of secondary records are usually designed to advance a party’s best or favoured position and not to record the reality on site.
 
The primary records are those that record events at the same time as the claim event arose or when the effects of that event occurred. Written contemporaneous records should be maintained (often in a pre-agreed form) as a matter of course.
 
The substantiation of disruption claims is, in particular, an area that would benefit greatly from better document management. Most disruption claims that I have come across seem, at best, an afterthought – usually a half-hearted attempt to up the ante for the purpose of negotiating a commercial solution. The reality is that a considerable amount of the contractor’s money is very often tied up in disruption, but more often than not a contractor will simply not have the records to adequately substantiate its entitlement. This often results in a global type approach which is rarely successful.
 
So what primary records should a contractor maintain? This may differ from case-to-case and will depend on the nature of the works or the requirements of the contract. My view is that as a minimum requirement contractors should maintain the following records:
 
• Labour and plant allocation sheets showing the labour and plant allocated to specific tasks on a daily basis (including labour allocated to additional or disrupted works).
 
• Daily diary – to include details of site progress, unusual site conditions, delay events and additional resources.
 
• Requests for information – these should be made using a pre-agreed format and not merely by way of correspondence.
 
• Confirmation of verbal instructions (CVI) – whenever an instruction is issued by the employer (or his agent) verbally, it should be confirmed by the contractor in writing and a separate file for CVI maintained.
 
• Drawing register – an up-to-date register for all drawings (and subsequent revisions) is essential.
 
• Minutes of meeting – minutes should be kept for all internal/external meetings and should in particular note progress of the works, any obstacles to progress and agreed action plans.
 
• Approvals and inspections – including for materials, work methods, and designs and the inspection of works and materials.
 
• Photographs – of almost all delay and disruption cases I have been involved in, photographs have provided an invaluable record of progress. Photographs should be dated and labelled. It is also useful to have photographs taken from the same places(s) during the course of the works to allow for comparison.
 
Armed with this information the prospect for the timely resolution of claims is greatly enhanced.
 
The contents of this article reflects the views of the author only. The content does not necessarily reflect the views or interests of Nakheel PJSC, or any of its subsidiaries, officers, or affiliates.

Construction Week

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