Disruption claims in construction
In construction contracts, the term 'disruption' refers to a loss of productivity due to a hindrance or interruption of the progress of the construction works which reduces the rate of efficiency.
If disruption is caused by the employer, the contractor may have grounds to seek compensation. Disruption, and claims arising to try and recoup losses incurred from it, are common on construction projects, particularly on larger and more complex projects.
The difference between disruption and delay is that the latter relates to lateness rather than productivity, although they can often be related. Delays can cause disruptions, and vice versa. Despite their inter-relation, they require a different approach to assessing claims.
When evaluating claims for delay, the terms of the specific contract are the usual starting point, and evidence is required that certain circumstances caused the delay. The terms of the contract are less useful when evaluating disruption claims. Instead, the contractor must provide reasonable evidence that:
- Progress of the works has been disrupted.
- Which element of the works and which trades have been disrupted, why losses occurred, and so on.
- The disruption incurred additional costs.
- The cause of the disruption constitutes a breach of contract.
Evidence will normally take the form of documented records demonstrating that disruption caused losses. However, this can prove difficult as the contractor can often not detect disruption until after it has occurred. In addition, isolating the loss of productivity to the cause of the disruption can be difficult as it may coincide with several other factors, and the effect of the disruption may be hidden by other issues.
Several methods can be used to estimate loss in relation to disruption, including:
- Measured mile analysis: Compares actual labour performance between two periods – a normal measured mile period and an impacted period.
- Baseline productivity analysis: A more conservative estimate used when an unimpacted section of the works is too difficult to isolate.
- Earned value analysis: Compares the amount and cost of work that was planned to have been done by a particular stage with the amount that has actually been done and what it has actually cost.
NB The term ‘disruption’ can also refer to the impact of new technologies and techniques on an industry. For more information, see Construction is an industry ripe for tech disruption.
Anticipate, react, recover; Resilient infrastructure systems, published by the National Infrastructure Commission in May 2020, defines disruption as: ‘A disturbance which interrupts the usual functioning of an infrastructure system or service, and its impacts.’
[edit] Related articles on Designing Buildings
Featured articles and news
Quality Planning for Micro and Small to Medium Sized Enterprises
A CIOB Academy Technical Information sheet.
A briefing on fall protection systems for designers
A legal requirement and an ethical must.
CIOB Ireland launches manifesto for 2024 General Election
A vision for a sustainable, high-quality built environment that benefits all members of society.
Local leaders gain new powers to support local high streets
High Street Rental Auctions to be introduced from December.
Infrastructure sector posts second gain for October
With a boost for housebuilder and commercial developer contract awards.
Sustainable construction design teams survey
Shaping the Future of Sustainable Design: Your Voice Matters.
COP29; impacts of construction and updates
Amid criticism, open letters and calls for reform.
The properties of conservation rooflights
Things to consider when choosing the right product.
Adapting to meet changing needs.
London Build: A festival of construction
Co-located with the London Build Fire & Security Expo.
Tasked with locating groups of 10,000 homes with opportunity.
Delivering radical reform in the UK energy market
What are the benefits, barriers and underlying principles.
Information Management Initiative IMI
Building sector-transforming capabilities in emerging technologies.
Recent study of UK households reveals chilling home truths
Poor insulation, EPC knowledge and lack of understanding as to what retrofit might offer.
Embodied Carbon in the Built Environment
Overview, regulations, detail calculations and much more.
Why the construction sector must embrace workplace mental health support
Let’s talk; more importantly now, than ever.
Ensuring the trustworthiness of AI systems
A key growth area, including impacts for construction.