Delays are an unavoidable aspect of construction projects, often arising from factors beyond a contractor’s control. When this happens, an Extension of Time (EOT) may be granted to adjust the project completion date. However, time alone does not account for the financial impact of delays. This is where a Loss and Expense (L&E) claim comes in, allowing contractors to recover additional costs incurred due to project delays.
What Is a Loss and Expense Claim?
A Loss and Expense claim is a formal request for compensation made by a contractor to a client (or employer) in a construction contract.
These claims cover extra costs incurred due to delays caused by relevant events, such as:
- Unexpected site conditions
- Severe weather
- Scope changes
- Client-driven delays
Loss and expense claims cover both direct costs (e.g., labour, materials) and indirect costs (e.g., overheads, administrative expenses).
Common Mistakes to Avoid
Many contractors struggle to secure full compensation due to avoidable errors. Here are key pitfalls and how to overcome them:
✅ Lack of Clear Evidence
Supporting documentation is essential. Ensure every cost is well-documented and justified with proper records—not just invoices, but actual proof of payment and project records.
✅ Missing Contractual Deadlines
Many contracts set strict timelines and procedures for submitting L&E claims. Failing to adhere to these can result in rejection or a reduced claim.
✅ Failure to Mitigate Delays
Contractors must demonstrate reasonable efforts to reduce the impact of delays. If these steps aren’t clearly outlined, compensation may be reduced.
Relevant Case Law: Lessons from the Courts
📌 Mallino Development Ltd v Essex Demolition Contractors Ltd [2022] EWHC 1418 (TCC)
The court awarded damages to the contractor after the employer failed to fulfil its contractual obligation to re-tender the works. This case highlights the importance of contractual compliance when seeking compensation.
Loss and Expense Claim: A Recent Success Story
A contractor engaged in a restoration project faced significant disruptions due to unforeseen delays, leading to substantial financial losses. Seeking to recover costs, they approached the DRS team for expert support in compiling a robust L&E claim.
✔ Comprehensive claim covering a 10-month period
✔ Detailed cost justifications backed by strong evidence
✔ Strategic attempts at informal resolution
When negotiations stalled, the DRS team initiated adjudication to recover the contractor’s costs. This proactive approach ensures the best possible outcome while minimising financial strain.
Need Support with Loss & Expense Claims?
Successfully navigating L&E claims requires expertise, strategy, and solid evidence. Whether you need help preparing a claim, negotiating compensation, or pursuing adjudication, the DRS team can support you every step of the way.
📩 Get in touch today to discuss how we can help you protect your financial interests and recover the costs you’re entitled to.