By Mark Sayer I Insights
Who Pays the Office Bills?
Understanding Formula-Based Claims for Head Office Overheads in 2025 (UAE Edition)
Project delays don't just impact schedules they put pressure on your office overheads. Staff, rent, utilities, legal teams all continue to cost whether you're on site or not. Formula-driven methods can help calculate what you're owed… but only if you’re armed with right data, especially in the rapidly evolving UAE market.
UAE Market Snapshot (2025)
• The UAE construction sector is experiencing 6.2% annual growth, with a market value of AED 189 billion in 2025, projected to reach AED 242 billion by 2029 Aceris Law+3LinkedIn+3LinkedIn+3MarketWatch+2GlobeNewswire+2Yahoo Finance+2.
• Inflationary pressures are pushing construction costs up by 2–5% this year .
• As cost increases and high-volume project pipelines persist consider Dubai Expo legacy, Abu Dhabi growth and industrial expansion; the stakes are high for protecting margin.
Why It Matters Now
With soaring overheads and tighter margins, being unable to recover unabsorbed home office costs after a delay could erode profitability. Formulae can help quantify those losses - if substantiated properly.
What UAE Courts Expect in 2025
Formula Options commonly used include:
• Eichleay – Allocates annual overheads across revenue; strong for suspended project scenarios.
• Hudson/Amended Hudson – Overheads represented as a percentage of contract
value; widely supported by the SCL Delay Protocol
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• Emden – Leverages recorded financials for accuracy in overhead allocation
What UAE Courts Expect in 2025
In the UAE, calculation of damages under Civil Code (Article 390) requires that costs reflect actual loss, not theoretical estimations practiceguides.chambers.com. While formulae are acceptable, they must be backed by verifiable financial records and demonstrable project impact.
✅ Four Rules for Reliable Head Office Overhead Claims
1. Substantiate with Books
Use audited accounts not budget estimates and align the revenue studied with the specific project.
2. Prove Resource Loss
Show how delays prevented your team from working elsewhere, citing UAE project timelines or lack of redeployment.
3. Highlight Downturn Impact
Rising costs and idle staff are real, document effects like delayed project starts and inflation time lag.
4. Tell the Financial Story
Articulate your methodology clearly. Show why you chose Eichleay, Hudson, or Emden, and how it applies to your project.
Final Word
In the dynamic UAE construction market, formula-based claims for overhead recovery can be powerful but only when they’re built on real data, credible analysis and solid narrative. Combine rigorous accounting with logical explanation, and your claim becomes not default guesswork but defensible fact.
Written by:
XX, Risk & Advisory Lead at Middleton
Supporting better decisions through clarity, accountability, and legal alignment.