Global Total Cost Claims within Common Law Legal Systems: Application to the World Bank Contract

Abstract

For a contractor to recover losses caused by events for which the employer is responsible, the contractor needs to (1) demonstrate that there are events for which the employer is responsible; (2) prove that the contractor has suffered loss; and (3) prove there is a causal link between the events and the losses sought to be recovered. However, sometimes it is impractical or impossible for the contractor to attribute specific losses or delays to specific breaches or events. In such cases, sometimes contractors submit the claim on a global basis. In a global claim (or total cost claim), the contractor does not adduce evidence to prove a causal link between its losses and the events for which the employer is responsible. Rather than prove the causal link, the contractor submits a collection of events and a total amount of loss incurred and argues that the events in their totality caused the loss. In this paper, the authors explained the global claim principle within the context of common law legal systems, and the requirements for a successful claim based on such principle are, as well, identified. The authors then (1) discussed the provisions related to delays, extension of time, and claims under the World Bank Conditions of Contract (WB Contract); (2) discussed the application of global claims under the WB Contract; (3) recommended appropriate contract administration guidelines for successful global claims under the WB Contract; and (4) identified the strategies employers may deploy to refute global claims submitted by contractors. This paper connected available literature and case law to help contractors submit successful global claims under the WB Contract and equally help employers identify the strategies that may be deployed to attack global claims submitted by contractors. This should support effective and efficient management of claims in construction projects operating under the WB Contracts.