It’s time construction claims consultants took on a share of the client risk
As the construction industry has evolved, so too have the pressures placed on contractors and project owners and the needs that construction claims consultants need to address.
Contractors are required to take on more risk than ever before, and as a result, Tungsten Capital has seen a need to evolve the way traditional construction claims consultants work, in order to reflect and appreciate the pressures that clients face.
We have done that by developing the ability to provide claims funding, and thereby relieve the financial strain that claims notices place on clients and their projects.
Traditional construction claims consultants
Traditionally, claims consultants undertake the preparation of claims on some form of time-related fee basis.
Under this model, costs can be considerable and will only add to an already negative project balance sheet. Equally, the quality of consultant employed can never be guaranteed and, should they fail to perform, the failure will have an adverse effect on the outcome of the claim.
Ultimately, the risk taken, both on the quality of claim, the time taken to undertake and complete the assignment and the financial risk of developing the claim, is borne entirely by the claimant. Furthermore, should the claim fail to achieve its objectives, then costs of its preparation simply serve to heighten the overall project loss.
The benefit of a claims funding service
In the initial instance, the benefit of construction claims consultants that offer a claims funding service is that it takes the financial pressure off the client whilst fighting the claim. So where you may already be out of pocket, you’re not continuing to direct funds that were intended for the project, into resolving an issue. It also means that the cost of fighting the claim can be taken off the balance sheet.
Crucially, we see the key benefit of our claims funding service as showing our confidence and commitment in a claim, and the advice that we are providing in order to resolve it. This is what we mean when we talk about sharing the risk.
As a team, we have always prided ourselves on only promising what we are confident we can deliver. Where other construction claims consultants might promise you a higher value win, we will only ever promise what we know is realistic. We will always fight for more, but to us, honest and open communications are the foundations of positive working relationships and the best possible outcomes.
By funding claims ourselves, we are committing to the authenticity of this motto by which we have always lived and worked.
How it works
Our claims funding service is best described as a no-win-no-fee model. Once you have come to us and our team have assessed the claim and decided whether it is eligible for funding.
Assuming it is, we cover the cost of preparing the claim. If the construction claim settles by negotiation or collective agreement, we receive our fee from the monies received from the claim. If the claim does not settle, we have the capacity to fund the entire cost of pursuing the case through to adjudication, arbitration or litigation.
In the event that the construction claim should fail, then the costs associated with the preparation of the claim and the formal dispute resolution process are borne by us. In short, our claims funding service removes the cost burden from the contractor or project owner.
Taking claims funding construction claims consultants global
Claims funding is a service we have been honing and developing for a couple of years, foreseeing the ways in which the industry has been developing. However, where we are developing it further in 2020, is to take it to new jurisdictions.
For example, this year, our team is increasing its work in the Middle East, under the new management of Regional Director, Fuad Iskafi. Nowhere in the world, is the construction industry more exciting, more innovative and more reflective of this need to adapt than there.
The ongoing explosion in residential property is leading to innovative design opportunities and developments, alongside fluctuating prices making the industry more competitive than ever and putting the squeeze on profit margins. With this in mind, we continue to develop our services in response to client needs and an ever changing industry.