FIDIC / Legal Reference: Equivalent to FIDIC Cost + Profit (Clause 20)
A claim by the contractor for financial loss arising from matters that are the employer’s contractual responsibility and that have disrupted or prolonged the Works. Loss and Expense is the UK JCT contract equivalent of the FIDIC cost and profit recovery mechanism under Clause 20.
What it means in practice
Loss and Expense claims encompass: prolongation costs, head office overhead contribution, loss of productivity arising from disruption, additional plant costs, additional materials costs, financing charges, and in some cases loss of profit. Each head must be separately proven by reference to actual records.
The contractor must demonstrate a direct causal link between the qualifying employer-risk event and the loss claimed. Global claims — which lump all losses together and attribute them collectively to a pool of employer events — are strongly disfavoured by tribunals and have a poor success rate in UAE-seated arbitrations.
Where disputes arise
UAE-seated tribunals have consistently rejected global or rolled-up Loss and Expense claims where the contractor cannot demonstrate item-by-item causation. The risk of a global claim being struck out in its entirety is significant.
UAE Context
In UAE construction projects, Loss and Expense heads often include items specific to the regional context: extended labour accommodation costs, visa and immigration costs for extended workforce, and the additional cost of working through additional UAE summer periods.
Related terms
e-Basel provides specialist Loss and Expense quantification, including item-by-item causation analysis and cost record review, for UAE construction claims.
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