Introduction — Dispute & Claims

Section 1

Purpose

Stage 8 — Dispute & Claims — covers the QS's role in managing, preparing, assessing, and resolving construction contract disputes and claims. While dispute and claims work can arise at any stage of the project, this stage addresses the dedicated knowledge, processes, and professional obligations required when a dispute escalates beyond normal commercial negotiation — requiring formal claim preparation, expert analysis, adjudication, arbitration, or litigation support.

RICS Conflict Avoidance and Dispute Resolution in Construction (1st ed., April 2012, reissued August 2024) establishes the minimum level of service that every chartered surveyor must provide in respect of conflict avoidance and dispute resolution: proactively managing potential disputes, recognising escalation, keeping clients informed, and understanding the available resolution mechanisms. The QS's first obligation is to avoid disputes; the second is to resolve them at the lowest possible cost; the third is to manage them professionally when resolution is not possible.

The HGCRA 1996 (as amended 2009) underpins the entire statutory adjudication framework in England & Wales — any party to a construction contract has the right to refer a dispute to adjudication at any time. The QS must understand this right, the procedural requirements, the tight timescales, and the consequences of failure to respond effectively. Dispute & Claims work is technically demanding and professionally sensitive — errors of commission (unsupported claims) and errors of omission (missed evidence) can cost clients very significant sums.

Section 2

Key Principles

RICS Conflict Avoidance and Dispute Resolution in Construction (1st ed., April 2012): proactive management, good documentation, early warning of disputes, and understanding the dispute resolution landscape — negotiation, mediation, adjudication, arbitration, litigation.
HGCRA 1996 (as amended 2009), Section 108: any party to a construction contract has the right to refer any dispute to adjudication at any time; the adjudicator has 28 days to decide from referral (or 42 days with referring party's consent); the decision is immediately binding.
RICS Damages for Delay to Completion (2nd ed., April 2024): liquidated damages are a genuine pre-estimate of loss and must be supported by a documented calculation; unliquidated damages require proof of actual loss.
RICS Ascertaining Loss and Expense (2nd ed., July 2024): the methodology for quantifying prolongation and disruption claims; Emden/Hudson formulae for head office overhead; time-based vs resource-based approaches.
Arbitration Act 1996: governs arbitration proceedings in England & Wales; the arbitrator's award is final and binding (subject to limited statutory appeal rights); arbitration is private, unlike litigation.
Professional obligations: RICS Rules of Conduct require chartered surveyors acting as expert witnesses to provide independent, objective evidence; RICS Expert Witness PS (2nd ed., effective 2 January 2018) sets the mandatory standards.

Section 3

Practical Application

Step 1

Conflict avoidance: proactively identify potential disputes early — unresolved variations, unanswered claims, ambiguous contract provisions; flag these to the client in writing and seek resolution before they crystallise into formal disputes.

Step 2

When a dispute arises, assess the contractual dispute resolution procedure: identify whether the contract requires negotiation, mediation, or a pre-conditions step before adjudication; follow the prescribed procedure or risk the adjudication being jurisdictionally challenged.

Step 3

On receipt of a Notice of Adjudication: notify the client's solicitor and senior QS immediately; the Referring Party must serve the Referral Notice within 7 days; the Responding Party has 7 days to submit a Response (or such other period as agreed).

Step 4

For claim preparation: assemble all contemporaneous records — site instructions, correspondence, programme updates, cost records, labour allocations, variation notices; do not rely on reconstruction of events from memory.

Step 5

Prepare the claim or defence document in the structure required: quantum section (loss and expense calculation); entitlement section (contractual basis for the claim); evidence section (supporting documents organised and cross-referenced).

Step 6

Consider mediation as a cost-effective alternative to adjudication for complex multi-issue disputes — the mediation success rate in construction is approximately 85%; costs are a fraction of adjudication for smaller disputes.

Step 7

After resolution, record the outcome in the project files and contribute the lessons learned to the firm's knowledge base — dispute outcomes are valuable for identifying contract or estimating weaknesses to be addressed on future projects.

Section 4

Common Mistakes to Avoid

Failing to keep contemporaneous records throughout the project — records are the foundation of every dispute; a QS who cannot produce contemporaneous evidence to support a claim position is professionally and commercially vulnerable.
Missing HGCRA/contractual procedural requirements — an adjudication commenced without a valid Notice of Adjudication, or with a Referral Notice served out of time, can be jurisdictionally challenged.
Attempting to conduct adjudication proceedings without specialist legal/dispute resolution support on high-value or legally complex disputes — the QS's role is quantum and commercial; legal analysis should involve the client's solicitors.
Acting as expert witness and advocate on the same matter — these are mutually exclusive roles; the RICS Expert Witness PS prohibits an expert from acting as an advocate.
Failing to advise clients of the adjudication timetable — adjudication runs to very tight timescales (28 days from referral); the QS must ensure the client understands the urgency and resource commitment required.

Section 5

APC Competency & Quick Reference

Conflict Avoidance, Management and Dispute Resolution Procedures Level 3 — adjudication, arbitration, expert evidence, claim preparation
Contract Practice Level 3 — contractual dispute resolution procedures, HGCRA, JCT/NEC dispute provisions

What is the minimum level of service that RICS members must provide in relation to conflict avoidance and dispute resolution?

Per RICS Conflict Avoidance and Dispute Resolution (2024): seek clarity in procurement documents to avoid ambiguity; identify and manage risks within the surveyor's expertise; manage day-to-day conflicts professionally and objectively; recognise dispute escalation and keep the client informed; understand the range of dispute resolution mechanisms; advise the client to seek specialist assistance when appropriate.

What are the key procedural requirements for commencing statutory adjudication under HGCRA 1996?

The contract must be a construction contract under HGCRA. The Notice of Adjudication must be served on the other party. The referring party must apply to the nominating body to appoint an adjudicator within 7 days. The Referral Notice (including all supporting evidence) must be served within 7 days of the Notice of Adjudication. The adjudicator has 28 days to reach a decision from the Referral Notice (42 days with referring party's consent).

What is the difference between liquidated and unliquidated damages in construction contracts?

Liquidated damages (LDs) are a genuine pre-estimate of the employer's loss in the event of contractor delay, agreed at the time of contracting and inserted in the contract particulars. They must be a genuine pre-estimate, not a penalty. Unliquidated damages require the employer to prove actual loss — they are not limited to the LD rate but require evidence of the specific financial impact of the breach. Per RICS Damages for Delay (2nd ed., April 2024), LDs are deducted via the Non-Completion Certificate mechanism.

Section 6

Dispute & Claims Checklist

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Task

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Contemporaneous records maintained throughout project (instructions, correspondence, programme, costs)

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Potential disputes flagged to client in writing as early as possible

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Contract dispute resolution procedure reviewed before commencing any formal process

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Notice of Adjudication served and timetable confirmed immediately on receipt

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Claim/defence document structured: quantum, entitlement, evidence

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Mediation considered for complex multi-issue disputes

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Dispute outcome documented and lessons learned recorded

Section 7

CPD Learning Outcomes

Apply the RICS Conflict Avoidance and Dispute Resolution framework to proactively manage potential disputes, recognise escalation, and advise clients on the appropriate resolution mechanism for each type of dispute.
Manage the procedural requirements of statutory adjudication under HGCRA 1996 — Notice of Adjudication, Referral Notice, Response, timetables — and prepare or review quantum sections of claim documents.
Distinguish between liquidated and unliquidated damages in construction contracts and advise clients on the conditions for deduction and the evidential requirements for each.

Section 8