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CAASA NEWSLETTER NOVEMBER 2024

The motivation behind this monthly newsletter is to provide better and more frequent communication to CAASA members, and to solicit suggestions and responses to the contents. We need input from you to ensure that the content of this newsletter, our webinars and annual conference remain both topical and relevant.

Any comments, suggestions or proposals please forward to secretary@adjudicators.co.za

CONTENTS:
Global Claims
CAASA Update
Mentoring

GLOBAL CLAIMS

In a sense this is the follow on to my previous article on the secondary impacts of change.

Construction contracts are drafted on the basis that claims, and their associated circumstances are dealt with on an individual basis, as and when they occur. An event happens, or an instruction is issued, which entitles the contractor to additional cost and/or additional time. The contractor motivates the claim in term of the contract, provides the relevant details to justify the additional cost and/or time and the engineer makes a ruling thereon.

But what happens when changes, delays and disruptions are coming thick and fast on an almost daily basis, the one impacting on the next? How then can each event be treated in isolation? What is a global claim?

In the construction industry, global claims are claims that consolidate multiple issues or events into a single, overarching claim for additional compensation and/or extension of time. These claims arise when multiple factors—such as delays, disruptions, or design changes—impact a project, and isolating the effects of each event is either impractical or impossible. Global claims are sometimes considered a "broad-brush" approach because they don’t precisely attribute individual costs or time impacts to specific events.

Some of the key aspects of global claims are:

A Lack of Specific Causation: Global claims are typically presented when it’s challenging to allocate specific costs or delays to each event due to overlapping effects.
A Single Claim for Multiple Events: A global claim aggregates multiple issues (like delays or scope changes) into one comprehensive demand, often due to an inability to segregate the impacts of individual events.
Challenges in Justification: These claims are controversial because the claimant must prove that the sum of all the issues collectively affected the project’s cost or programme, even if direct cause-and-effect relationships aren’t clear.

In South Africa, global claims are often contentious in construction disputes. Our courts generally require that claims in construction disputes be substantiated with specific causation and quantification. In deciding to submit a global claim the following needs careful consideration.

Requirement of Causation and Quantification: South African courts, like those in many common-law jurisdictions, traditionally expect contractors to demonstrate causation for each claim, meaning they must link each delay or disruption to its corresponding impact on time and cost. In cases where global claims are made, the courts are required to assess if the evidence sufficiently proves that cumulative delays affected the contractor's performance. Courts tend to be skeptical of claims lacking specific causative links.
Tension Between Precision and Practicality: Courts recognize the challenge in providing precise causation in complex construction projects with interwoven issues and global claims are accepted if they are the most practical way to address the losses. However, contractors must generally show that it's impossible or impractical to separate the impacts of individual events without detrimentally affecting their claim.
Burden of Proof: In cases involving global claims, the burden of proof rests with the contractor to prove both that the delays were caused by the employer or a third party and that the damages were indeed incurred as a result. South African courts will apply a "balance of probabilities" standard, where the evidence must reasonably show the likelihood of the cumulative impact. The onus rests with the contractor to separate out his own delays from those of the employer, the failure to do so is often a fatal flaw to a successful global claim.

While South African law lacks detailed provisions on global claims, our courts often reference English precedents, which provide frameworks for analyzing cumulative claims. For example, the Walter Lilly & Co Ltd v Mackay [2012] EWHC 1773 (TCC) case in the UK sets out principles for considering global claims, particularly around fairness in complex, interwoven delay situations.

Closer to home my own personal experience of global claims was at Medupi Power Station where it became impossible to evaluate claims on an individual basis. The only practical solution was bundle up a series of individual events into a “global claim” for a single extension of time and associated costs. Fortunately these were agreed at site level without having to resort to adjudication or arbitration.

Just like any other claim the success (or failure) of a global claim lies in the quality of the records kept.

CAASA UPDATE

My thanks to all CAASA members who attended our conference on 15th November, either in person or on line. I hope you found it both informative and of value in your daily occupation, or indeed when involved in an adjudication.

While presenting webinars and conferences on line enables us to reach a much wider audience, it detracts from the active participation and networking opportunities that go along with attending in person. We need to strike a balance between the two and I would be interested in receiving suggestions on exactly how to do this.

MENTORING

Interest in a mentoring program appears to be growing. With that in mind, and as I mentioned in my opening remarks at the Conference, we are hoping to launch this program during the course of next year.

Members who are interested in being considered for admission to the program as a mentee are requested to send in a short paragraph or two to chairman@adjudicators.co.za setting out what you are looking for in the way of mentoring and motivating why you should be selected for this program.

This is the last newsletter for 2024. May I wish all CAASA members a peaceful and blessed festive season with your families and friends. Be careful on the roads and enjoy the break.