By Mark Sayer I Insights
Can a Contractor Recover the Cost of Preparing a Claim?
In the world of construction and commercial contracts, claims are an unavoidable reality. Delays happen. Scope changes. Variations creep in. And when they do, contractors are often left footing the bill, not just for the extra work but for the cost of preparing the claim itself. Which raises an important and often overlooked question:
Can contractors recover the cost of preparing a claim?
The Short Answer:
Sometimes — But It’s Complicated
Recovering the cost of claim preparation isn’t guaranteed.
It depends heavily on four key factors:
• The wording of your contract
• The legitimacy of your claim
• The reasonableness of your costs
• Your compliance with legal and procedural rules
Let’s break these down.
1. What Does the Contract Say?
Start with the contract. If there’s an express provision allowing you to recover claim preparation costs typically found in clauses relating to variations, delay and disruption or dispute resolution - you’re on firmer ground.
However, most standard forms (like FIDIC, JCT, or NEC) do not automatically entitle contractors to claim these costs unless clearly stated. That means without the right language, you may be left absorbing the costs even if your claim is ultimately successful.
👉 Tip: Always negotiate your contracts with this in mind, especially on large or complex projects where claims are more likely.
2. Is the Claim Valid and Well-Founded?
Courts and adjudicators won’t look kindly on vague or speculative claims. To stand a chance of recovering preparation costs, your claim must:
• Be based on a genuine entitlement
• Arise from a breach, delay or instruction outside your control
• Be backed by clear evidence and documentationIf the claim is found to be frivolous, inflated or procedurally flawed, not only could you lose but you may also absorb the cost of preparing it and even risk counterclaims or cost orders.
3. Are the Costs Reasonable and Proportionate?
Claim preparation can involve:
• Delay analysis and quantum reports
• Specialist consultants and legal input
• Internal time and documentation collation
To be recoverable, these costs must be reasonable, necessary and proportionate to the complexity and scale of the dispute. Excessive or poorly documented fees will likely be challenged.
👉 Tip: Keep detailed time records, invoices and justification for all claim preparation costs from the outset.
4. Have You Followed the Right Process?
Even if the contract allows recovery, you may still be out of luck if you miss:
• Notification deadlines
• Evidence submission windows
• Proper dispute resolution procedures (e.g., adjudication, DAB, or arbitration)
Failure to comply with statutory or contractual mechanisms can undermine your entire claim including any entitlement to recover costs.
So, Can You Recover the Costs?
Yes — but only when:
• Your contract expressly allows it, or
• It’s accepted as a matter of fairness or case law in the jurisdiction, and
• The claim is well-founded, reasonably costed, and procedurally sound
In practice, recovery usually comes via negotiation or legal proceedings, rather than automatic reimbursement.
Final Word:
Should You Even Try?
Before investing in a formal claim, ask yourself:
• Is the value at stake worth the effort?
• Can the relationship with the client withstand it?
• Do I have a contractual or legal right to pursue these costs?
In many cases, early negotiation backed by a clearly prepared summary
of entitlement can resolve matters before costly escalation.
If you’re unsure, seek expert guidance early. At Middleton Consulting, we help contractors structure their claims strategically, protect their commercial position and recover what they’re rightfully owed without burning relationships in the process.
Need advice on your next claim?
Middleton Consulting works with contractors and developers across the UAE and UK to mitigate risk, resolve disputes and secure results