Virtually all arbitrated construction claims are based in contract. Damages in contract actions are compensatory and calculated arithmetically. It makes sense, therefore, to begin each construction arbitration (or mediation) with a reasonably standardized project accounting form, showing precisely how the damages being sought are claimed, i.e., the “arithmetic” of the claim. Use of a pre-hearing damages accounting form also assists to organize the presentation of information to the neutral, reduces hearing time dramatically, and greatly facilitates accurate awards. This chapter discusses the development and use of a proposed Claims Management Damages Accounting Form (the “Form”).

 

The objective of the Form is to provide an initial calculation of each party’s damages as claimed. The calculation typically is developed within the context of an overall project accounting. A good Claims Management Damages Accounting Form will reveal in clear detail the method intended by each party to claim and calculate its damages. It will identify both the target numbers for each component of a claim and the methodology for calculation, information critical to an efficient hearing process, as well as an accurate determination of an award. It eliminates the questions frequently pondered by adversaries and neutrals at the start of an arbitration, “Where is (my opponent or claimant) coming from and where is he/she going?”