Claims Analysis

Claims Analysis

Phase I: The Factual Investigation

The factual investigation of a public works claim is crucial. A well-organized, thoughtful investigation will provide the client with the information that will increase the likelihood of a cost-effective resolution of any claims on the project.

The most important aspect of this investigation, as well as subsequent claims analysis, is to have a systematic plan so that the hundreds (or thousands) of hours spent can be applied to the most productive and useful tasks possible. The quality of the factual investigation will greatly assist in negotiating or litigating claims from a position of knowledge and strength.

The specific tasks to be performed in the factual investigation are many and include contract review, statutory notice, plans and specifications review, review of indemnity and insurance issues, and meetings with the various players involved with the project.

Phase II: Detailed Claim Analysis

The breadth of analysis set up in Phase I is actually carried out in Phase II. To ensure that expenditures for the claim analysis are optimized, it is suggested that Phase II be organized in two parts. The first part of Phase II ends at a distinct milestone at which a broad, but limited, analysis of the claim has been completed and a settlement of the claim or individual issues may be negotiated, thus eliminating the need for further analysis. On the other hand, if a settlement cannot be achieved at this juncture, nothing has been lost, and the analysis continues in greater depth.

Phase III: Pursuing Settlement

If a claim is not resolved after Phases I and II have been completed, mediation, negotiation, or other means of settlement may be utilized, as summarized below.

Advantages to Early Settlement

The most important advantage to early settlement is money. Few public agencies or contracting firms can afford a lengthy trial or arbitration. Large construction cases are expensive to bring to trial. The administrative expense of being involved in such cases often exceeds the attorneys' fees and experts' costs. These costs are burdensome to public agency operations and can put a medium-size construction or design firm out of business.