Dilemma 1:  Submitting a contract claim for delay - Answer

 

In submitting the claim, you are making a representation as to the additional time that your company is due.  The amount of additional time that you are given will have a financial consequence (the amount of any liquidated damages payable, and amount of any additional payment).  It can be a criminal offence to make a representation which you know is false, or which you know is probably false, or which you do not honestly believe is true, in order to gain some financial advantage for yourself or another person or organisation.  You know that it would be a false statement to claim that the 30 days delay caused by the supplier was caused by the project owner.  You are not sure what caused the remaining 40 days delay.  While it is possible that it could have been caused by the project owner, you are aware that it could have been caused by the supplier, or by other causes.  Therefore, you do not honestly believe that it is true when you claim that these 40 days were caused by the project owner.  Consequently, if you submitted this claim to the project owner alleging that it caused all 100 days delay, then you personally, and your company, may be liable for fraud.  

 

The correct and safe approach is always to state in a claim only what you honestly believe to be true and to acknowledge where there are areas of uncertainty.  If you make an honest mistake in your claim, this is very unlikely to be a criminal act.  So, if, for example, you honestly believed that 30 days delay was caused by the project owner’s variation, but it turned out that you had made a mistake, and it was only 25 days delay, then this is an honest mistake, and not a criminal act.  Therefore, you should claim that 30 days delay is due to the project owner, and acknowledge that 30 days delay is your company’s responsibility.  Dealing with the remaining 40 days depends on the applicable law and terms of the contract.  Ideally, there should be some mechanism for apportioning the 40 days on a fair and reasonable basis, or for a third party adjudicator to apportion the responsibility.  If the contract only allows an extension of time if the contractor can actually prove the cause of delay, this may result in the contractor bearing the responsibility for the remaining 40 days.  This may seem to be an unfair outcome, but it is what the parties have contractually agreed.  You should not attempt to correct an agreed contractual outcome (even if you perceive it to be unfair) by undertaking a criminal act.

 

This suggested approach may not in the short term be the most commercially profitable approach, but it is the one that is more ethical and that should avoid criminal liability.