RC107 JulyAugust2023 - Magazine - Page 29
POTENTIAL CLAIMS CAUSATION
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The September/October issue of ReNew Canada
will feature an article from consultancy firm HKA
on their latest CRUX Insight Report, which analyzes
dispute causation data to provide insight into the
causes of claims and disputes on major capital and
infrastructure projects.
The CRUX Insight Report,
introduced in 2018, is based
on first-hand information
and data from industryleading consultants working
on thousands of projects.
Findings are compiled into an
annual report identifying and
evaluating trends and patterns
underpinning potential claims causation factors to
proactively address and mitigate them before they
escalate into disputes. The information gathered can
be distilled down to a variety of categories, including
but not limited to breakdowns by market sector
(buildings, public infrastructure, power, utilities,
etc.), province or state, cost claimed, and extension
of time claimed. Assessing and re-assessing a wide-
RENEWCANADA.NET
ranging data collection from these angles enables the
development of shareable one-of-a-kind perspectives
and insights.
CRUX delivers comprehensive information available
on several major market sectors in North America.
The latest data set includes 90 projects in Canada
with an average CAPEX value of $899,020,302 and
394 projects in the United States with an average
CAPEX value of $569,172,813. A broad comparison
of this data reveals that across both countries, there
are several common top causes of claims and/
or disputes, including change in scope; incorrect,
incomplete, or late design information; workmanship
deficiencies; unforeseen physical conditions; and
contract management and/or administration failure.
However, the analysis also highlights pertinent
differences. In the United States, subcontractor/
supplier management, operational performance, and
installation failures feature among the more frequent
factors of a claim or dispute. At the same time, the
Canadian data shows that site access and workforce
restrictions, bias and cooperation challenges, and
personality/cultural differences were more significant.
These geographic breakdowns of CRUX data allow
HKA to establish common themes across regions
and pinpoint issues and complications specific
to particular countries.
The most recent report highlights unique issues in
the Canadian and U.S. markets, demonstrating how
the most dominant causes of claims and disputes
are intertwined. In a future article, we will provide
more nuanced insights into the North American data
set, focusing on public infrastructure. While public
infrastructure projects can address critical social
issues, climate change concerns, and increases in
urban populations, they are often also high-stakes and
high-cost projects that combine the risks of significant
funds with demanding technical requirements and
public scrutiny. These projects also face the hurdles
of longer timeframes, rising labor and materials costs,
and an active political environment, influencing their
progress. Skills shortages, legal requirements for
public infrastructure projects, regulations pertaining
to payment rules, the continuing impacts of COVID-19,
and unrealistic schedules and timelines are some of
the specific aspects that tend to debilitate projects
in the Canadian market. In a fast-track environment
demanding the rapid delivery of complex projects,
problems will only persist without a significant change
in approach.
JULY/AUGUST 2023 – RENEW CANADA 29
