Cumulative Impact Claims: Key Considerations

What is a Cumulative Impact Claim?

A cumulative impact claim addresses the "ripple effect" of multiple variations on a construction project. While the direct impact of individual variations is often straightforward to assess and quantify, the combined effect can significantly reduce productivity on unchanged work through a synergistic effect that goes beyond each variation's direct consequences.

These claims differ from direct impact claims as they focus on the overall project disruption rather than specific change orders. The complexity arises because these impacts often manifest in work not directly affected by the changes themselves, making them more challenging to document and prove.

Common Causes of Cumulative Impact

• Trade stacking and concurrent activities - multiple trades forced to work in the same area simultaneously

• Reassignment of manpower - frequent movement of workers between tasks, disrupting workflow

• Dilution of supervision - management attention diverted to addressing changes rather than overseeing planned work

• Excess overtime and worker fatigue - extended hours leading to diminished productivity

• Declining morale and productivity - workforce frustration with constant changes and disruptions

• Out-of-sequence work - logical construction sequence disrupted by changes

• Learning curve disruptions - crews repeatedly stopped from achieving optimal efficiency

• Material and equipment availability issues - resources diverted to changed work

Cumulative impact claims typically arise on projects experiencing numerous changes, particularly when those changes occur late in the project or in compressed timeframes. The burden of proof lies with the contractor to demonstrate both causation and resulting damages.

Contractual Considerations

Contractors should review contract provisions carefully before pursuing cumulative impact claims. JCT contracts provide scope for such claims through their variation and loss and expense provisions, while NEC contracts require early warning notices and compensation events to be promptly notified. FIDIC contracts contain specific procedures that must be followed to preserve claim rights.

Pay particular attention to notice requirements, time bars, and waiver provisions. Some contracts attempt to include "no cumulative impact" or "full accord and satisfaction" language with each change order, which can potentially bar future claims if not properly addressed.

Quantification Methods

The "measured mile" approach is generally preferred by courts and arbitrators, comparing productivity in impacted versus non-impacted periods on the same project. This method analyses the difference between productivity during normal operations and during the disrupted period.

When project-specific data is unavailable, industry studies may be used as references. Total cost and modified total cost methods are typically viewed as methods of last resort due to their less precise nature.

Expert testimony from scheduling and productivity specialists is often crucial to successfully quantifying cumulative impact damages, especially on complex projects where multiple factors may influence productivity.

Keys to Success in Pursuing Claims

Monitor productivity from project start, establishing baseline metrics before disruption occurs. Maintain detailed records, including daily reports, timesheets coded to specific activities, correspondence documenting concerns, and photographs showing conditions.

Comply with contractual notice provisions meticulously, ensuring all required notifications are timely and properly formatted. Carefully document the causal link between variations and productivity losses through contemporaneous records rather than after-the-fact analysis.

Consider segregating cumulative impact costs from direct impact costs in project documentation. This separation helps demonstrate that these effects represent damages beyond those already compensated through change orders.

Need Assistance?

if you require assistance with a construction claim or dispute, do not hesitate to get in touch for a no-obligation complimentary review.

Contact

Mark Holden-Smith

07834284308

mark@holden-smith.com