Sources, causes and minimisation of contractual claims in civil engineering projects in Hong Kong

Significantly increasing frequencies and magnitudes of contractual claims have accompanied the growth of construction activities in Hong Kong. This research was mooted to identify the significant sources and causes of claims in the traditional remeasurement types of contract, and to formulate methods for minimising avoidable claims. Qualitative methods were used to draw on the experiential knowledge from the construction industry as to the perceived frequencies, magnitudes and avoidabilities of claims from various sources and their causes, complemented by quantitative methods, used for example to derive the average frequencies and magnitudes of common categories of claims permissible under the Hong Kong Government General Conditions of Contract for Civil Engineering Works. Risk allocation policies adopted in some internationally used standard forms of contracts - in specific areas such as 'delays' and ‘time extensions' - were compared, to provide the background for the study，followed by a study of specifications. Sources of claims were identified from available literature on claims in other contractual regimes. Particular areas in the General Specification for Civil Engineering Works (1992) were analysed after being found to be specially claims-sensitive. Average frequencies and magnitudes of categories of claims (for extra costs and extensions of time) from 67 civil engineering projects were analysed to derive typical claims patterns. A systematic method to obtain reliable data on Government projects was recommended to develop a model to predict the project contingencies relating to construction claims. Perceived frequencies, magnitudes and avoidabilities of claims from different sources were obtained from 55 responses to the questionnaire survey. A 'Claims Focus Indicator' was developed in this study to direct managerial attention to potentially significant sources of claims. Significant causes of claims from such sources were next validated and compared following semi-structured interviews of 11 experts from the industry. Methods to minimise and/or control the avoidable claims were formulated based on the identified significant sources and causes. Since 'variations' were found to be a leading source of claims, three case studies on the causes of 'variations' were carried out and correlated with the perceived common causes of 'variations'. An in-depth study was carried out on the claims arising from 'instructions not being issued' based on a survey of responses from 11 practitioners to 10 typical problems. Recommendations based on all of the foregoing findings were formulated to address significant causes and sources of claims in Hong Kong civil engineering projects.