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In the complex and dynamic world of construction, delays are unfortunately a common occurrence. These delays can have serious financial implications for both contractors and clients. One important legal and contractual mechanism used to address the financial consequences of delays is known as a Prolongation Claim. Understanding what prolongation claims are, when they can be used, and how to support them with evidence is essential for anyone involved in construction projects—be it a project manager, contractor, consultant, or legal advisor.

What Are Prolongation Claims?

Prolongation claims refer to claims made by contractors to recover additional costs that arise due to an extension of time caused by delays for which they are not responsible. These delays can stem from a variety of reasons, such as late instructions from the client, variation orders, design changes, access restrictions, or unforeseen site conditions.

The fundamental premise behind a prolongation claim is simple: if the contractor is delayed through no fault of their own and is granted an extension of time, then they should also be entitled to claim the extra costs incurred as a result of being on site longer than originally planned.

Common Causes Leading to Prolongation Claims

Delays can occur in construction for numerous reasons, and not all of them justify a prolongation claim. For a successful claim, the delay must be:

• Beyond the contractor’s control

• Recognized as compensable under the contract

• Properly documented

Some common causes that may give rise to valid prolongation claims include:

• Delays in obtaining permits or approvals

• Changes in the scope of work

• Late delivery of client-supplied materials

• Inaccurate site information

• Poor project planning by the employer or their agents

• Force majeure events (depending on contract terms)

Key Elements of a Successful Prolongation Claim

A well-substantiated prolongation claim should include detailed evidence and documentation to support the contractor's case. The main elements typically include:

1. Entitlement to Extension of Time (EOT):Before a prolongation claim can be considered, the contractor must have been granted a valid extension of time under the contract.

2. Causation:There must be a clear link between the delay event and the extended duration of the project.

3. Additional Costs:The contractor must provide credible proof of the additional costs incurred during the prolonged period. These could include extended site overheads, labor costs, plant and equipment hire, and other general expenses.

4. Contractual Basis:The contract should clearly provide for the right to claim such prolongation costs. Common forms of contract such as FIDIC, JCT, or NEC usually have specific clauses addressing this.

How to Calculate Prolongation Costs

Calculating the amount to be claimed in a prolongation claim can be challenging and must be approached carefully. Some standard methods include:

• Actual Cost Method:This method involves calculating the actual additional costs incurred during the prolongation period, backed by invoices, payroll, and site records.

• Head Office Overhead Claims:Sometimes referred to as “unabsorbed overheads,” these are often calculated using formulas like the Hudson or Eichleay formula, though their acceptance depends on the jurisdiction and the contract.

• Loss of Productivity:If the delay has affected productivity, this may also be quantified and included in the prolongation claim, provided there is sufficient data to support the assertion.

Challenges and Disputes Around Prolongation Claims

Prolongation claims are often the subject of intense scrutiny and dispute. Employers and contract administrators may question the validity of the delay, the calculations of cost, or whether the contractor took all reasonable steps to mitigate the delay.

Some of the common defenses used against prolongation claims include:

• Concurrent delay (where both parties are responsible for delays)

• Failure to provide timely notice as required under the contract

• Lack of proper documentation

• Inflated or unsubstantiated cost claims

Best Practices for Contractors

To strengthen the chances of a successful prolongation claim, contractors should follow best practices from the outset of the project:

• Maintain detailed site records and daily logs

• Submit timely notices of delay

• Keep track of all changes and instructions

• Regularly update project schedules

• Document additional costs in real-time

Engaging a construction claims consultant early in the process can also be beneficial. These experts can help prepare the claim in a way that meets legal and contractual requirements, ensuring a higher likelihood of success.

Legal and Contractual Framework

Different standard forms of contracts treat prolongation claims differently. For example:

• FIDIC Contracts: These typically provide clear guidance on EOT and cost claims due to employer delays.

• JCT Contracts: Often allow for loss and expense claims if the delay is the employer’s responsibility.

• NEC Contracts: Use a compensation events process to manage time and cost implications concurrently.

Understanding the nuances of the specific contract in use is essential for preparing or defending against a prolongation claim.