Executive Snapshot: Winning a Delay Compensation Case

A mid-sized contractor faced project delays caused by the client’s own actions—but the contract made claiming compensation difficult. By analyzing delay events, drafting a compliant notice strategy, and supporting the claim with a forensic delay analysis, the contractor won a significant compensation award. This delay compensation case shows how smart legal tactics and technical precision can level the field for mid-tier firms.

Background / The Situation: Preparing for a Delay Compensation Case

Our client was a regional construction contractor based in the Gulf, working on a public-private infrastructure project. The company was awarded a lump sum turnkey contract under the FIDIC Silver Book 2017 for the design and construction of a logistics facility, including road works and utilities.

Six months into the execution phase, the project began to stall. Access to the site was restricted due to unresolved land issues, and key design inputs from the employer were delayed. These setbacks created cascading effects—delaying procurement, subcontractor mobilization, and ultimately, the delivery timeline.

The contractor was stuck: the delay wasn’t their fault, but they needed to prove it contractually. With penalties looming and cash flow at risk, they sought a strategy to file for delay compensation case.

The Problem: Legal Complexities in a Delay Compensation Case

The contract included a liquidated damages clause and placed most design risks on the contractor. Worse, the employer’s own delays weren’t clearly defined as compensable. Without immediate action, the contractor risked losing millions in both delay penalties and unrecovered costs.

Here’s what made it complicated:

• Site Access Was in Employer Scope, but poorly defined.

• Ambiguous Contract Clauses blurred the line between delay vs disruption.

• No Initial Notices were issued by the contractor when delays first occurred.

• Timebar Clauses meant claims could be dismissed if not submitted within 28 days.

This wasn’t just a scheduling issue—it was a legal battle over contractual rights. The contractor had to act fast and strategically to preserve their entitlement and avoid default in the delay compensation case.

The Strategy or Solution: Key Steps in Winning a Delay Compensation Case

Step 1: Retrospective Delay Mapping

We started with a forensic delay analysis:

• Reviewed progress reports, site diaries, correspondence logs

• Mapped actual events against the baseline project schedule

• Identified the Employer-Caused Delays (ECDs) that could be isolated and quantified

The delays were mainly tied to:

• Late handover of the western plot (Plot B)

• Delayed approvals for revised drainage designs

• Uncoordinated third-party utility relocation

Step 2: Legal Risk Review in the Delay Compensation Case

We conducted a clause-by-clause review of the FIDIC Silver Book provisions, focusing on:

• Clause 4.6 (Co-operation)

• Clause 8.4 (Extension of Time)

• Clause 20.2 (Claims for Payment and EOT)

• Clause 1.1.6.7 (Site Possession)

We determined that:

• The delays fell under “Employer Risk Events”

• The contractor retained rights to claim both time and cost—but only if proper notices were given

Step 3: Strategic Claim Drafting for Delay Compensation Case

Our next move was to:

• Issue a “revival notice” referencing prior communications and invoking the exception to time-bar clauses under Sub-Clause 20.2.5

• Submit a structured delay compensation case, including:

  • Executive Summary

  • Chronology of Delay Events

  • CPM analysis and narrative

  • Cost impact calculations (idle plant, extended prelims, labor standby)

  • Contractual entitlement argument

Step 4: Engaging in Constructive Negotiation in a Delay Compensation Case

Instead of launching a formal dispute process, we suggested a commercial negotiation with the employer’s representative. We:

• Sent a without-prejudice proposal

• Proposed a split: EOT granted in full; cost claim negotiated at 70% of actuals

• Offered to include acceleration measures if part of the claim was honored

The employer saw the strength of the evidence and the fairness of the offer—and chose to settle the delay compensation case.

The Outcome

The contractor was awarded:

• A 4-month extension of time with no liquidated damages

• USD 480,000 in delay-related costs, covering:

  • Extended site management

  • Additional financing costs

  • Standby costs for critical subcontractors

The commercial negotiation avoided arbitration or adjudication and preserved the relationship for future tenders. Most importantly, the contractor was able to recover significant cash and protect its reputation with suppliers.

The entire process—from strategy design to outcome—took 10 weeks.

Key Takeaways

3 Lessons from This Case:

• Time-Bar Clauses Aren’t Always Final: If the employer was aware and didn’t object, you may still have a window to claim in a delay compensation case.

• You Must Prove Delay With Data: Technical delay mapping is essential—not just legal argument.

• Negotiation Can Save Relationships: Commercial settlements often deliver more value than formal disputes.

Best Practices for Mid-Sized Contractors:

• Keep detailed site diaries and approval logs

• Train project managers to issue early warning notices

• Regularly update CPM schedules to reflect reality

• Include claim preparation costs in your pricing

Call-to-Action

If your firm is facing project delays, don’t wait until the damage is done. Whether you need to preserve your rights under a FIDIC contract, negotiate a delay compensation case, or draft a defensible extension of time notice—we can help.

👉 Book a consultation today to discuss your project.

Or, download our Delay Compensation Case Starter Checklist to assess your current position before taking legal action.