Loss and expense

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Loss and expense
  • What is loss and expense?
  • Categories of loss and expense
  • Increased preliminaries
  • Overheads
  • Wasted management time
  • Loss of profit
  • Loss of productivity or uneconomic working
  • Inflation
  • Interest for non-payment
  • More...

Loss and expense

Claims by contractors for loss and expense arising from a disturbance to progress of the works are one of the most debated and contentious areas of construction law, often leading to disputes between the employer and the contractor. This Practice Note explains the basics of loss and expense claims and looks at how the subject is dealt with in the JCT, NEC and FIDIC contracts.

For a list of the key issues to consider in relation to a claim by a contractor for reimbursement of loss and expense and/or an extension of time, see also Practice Note: Time and money claims.

What is loss and expense?

Loss and expense is the term often used (most notably, in the JCT contracts) to describe the additional costs incurred by a contractor as a result of disturbance to the regular progress of the works caused by matters either within the employer's control or by breaches of contract by the employer. Loss and expense costs may be incurred as a result of:

  1. delay to the works (also known as prolongation costs). For example, if the works are delayed the contractor may be entitled to an extension of time but it may also incur additional costs as it will probably have to maintain its site facilities for longer than expected

  2. disruption to the works. For example, if the employer gives the

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