Five Questions a CEO Should Ask About Every Major Construction Claim

When a major construction claim arrives in the boardroom, the conversation is usually about quantum, liability and next steps. But by the time a claim reaches that stage, most of the decisions that determined the outcome have already been made — and many of them were made poorly, simply because no one in the project team understood the contractual requirements.

Here are five questions that will tell you whether your organisation is managing claims or being managed by them.

1. When did we first notify the employer of this claim — and was it within the contractually required period?

Under FIDIC, PAM and most standard forms, the notice requirement is a condition precedent. If notice was not given within the specified period, the claim may be barred entirely — regardless of its merit. If the answer to this question is "we are not sure" or "we notified them when the claim was prepared," the company may have already lost its entitlement before the boardroom discussion began.

2. Do we have contemporary records that substantiate every element of this claim?

A claim is only as strong as the records that support it. If the project team relied on memory, reconstructed narratives or incomplete site records, the claim will be vulnerable to challenge. The question is not whether the work was done — it is whether it can be proved within the contract's evidentiary requirements.

3. Was the instruction that caused this claim given in writing by a properly authorised person?

Verbal instructions are routine on construction sites, but under the Four-Corner Rule, only written instructions carry contractual weight. If the team acted on a verbal direction without obtaining written confirmation, the company may have performed substantial work for which it has no contractual entitlement to payment.

4. Has this claim been properly valued in accordance with the contract's valuation rules?

Many claims fail not because the work was not done, but because the valuation method in the contract was not followed. The contract specifies how variations are to be valued — whether by reference to billed rates, new rates or daywork. If the claim was valued outside those rules, the employer is entitled to reject it and substitute its own valuation.

5. What did we learn from this claim that will prevent the next one?

This is the most important question, and the one most organisations never ask. If contractual problems keep recurring — missed notices, unconfirmed instructions, poor records, late claims — the fault is not with the project team. It is with a system that does not train, brief, monitor or support the team in meeting its contractual obligations.