The successful delivery of a construction project requires the active management of four major factors: scope, cost, time, and quality. These factors are measured by one or more of the following parameters: contract value, contract schedule, and fitness for purpose. Issues and events affecting these factors can force project participants to incur a loss or leave the project owner1 with a product inferior to that specified in the contract. These consequences often lead to a claim for losses and damages. Such losses may include the cost of extra work, delay-related costs, and the cost of incremental labor and equipment resulting from lost productivity associated with project disruption.
The calculation of losses or damages aims to put the plaintiff in as good a position as it would have been but for the defendant's actions. Calculation of damages often involves complex issues and must work within the limitations of the available information and applicable legal parameters. Plaintiffs often develop claims after a project's completion, when information and project personnel often are no longer available, restricting an expert's ability to perform a robust analysis. Practitioners must show reasonableness and practicality, balancing sound technique with a commonsense, flexible approach to damages.
This chapter discusses various damages models for common construction claims. Construction projects differ, ...