SURVEY: HOW APPROPRIATE IS THE MEASURED MILE METHOD?

Transcription

1 SURVEY: HOW APPROPRIATE IS THE MEASURED MILE METHOD? Extract of LLM in Construction Law & Practice Dissertation by Robert Gemmell. January 2016

2 1 Introduction These survey results are an extract of the dissertation document The quantification of loss caused by disruption how appropriate is the measured mile? written by Robert Gemmell. The research was undertaken as part of a Masters in Construction Law and Practice through The University of Salford in the UK. The research was carried out in accordance with Salford University s ethical requirements policy S U R V E Y M E T H O D Questionnaires were prepared and sent to experts, judges, arbitrators, adjudicators, lawyers (both solicitors and barristers), those who work in the contract/legal department of contractor s and those who work in the legal/contract department of client s. 367 participants were targeted directly via . In addition, the survey was promoted on the following LinkedIn groups: Forum for International Construction Law (112 members); Construction Lawyer Network (6,620 members); Chartered Institute of Arbitrators (5,629 members); Australian Construction & Engineering Law (827 members); Construction Law Group (1,00 members); Society of Construction Law Australia (1,313 members); Arbitration (1,518 members); Alternative Dispute Resolution (ADR) Professionals (17,058 members); and Construction Claims Network (8,605 members). Responses to the questionnaire were collected from 16 June 2015 to 19 August responses were received. Survey: How appropriate is the Measured Mile Method? 2

3 2 Survey Results Q 1 : W h a t i s y o u r p r i m a r y p r o f e s s i o n? Expert 2 Judge, arbitrator and/or adjudicator 72 Lawyer 50 department in contractor 13 department in client This question was designed to ensure a sufficient response was obtained from each professional group targeted and to identify any similarities or differences between the responses gathered in future survey questions between the different groups surveyed. Q u e s t i o n 2 : H a v e y o u d e a l t w i t h c l a i m s t h a t c o n c e r n t h e q u a n t i f i c a t i o n o f l o s s c a u s e d b y d i s r u p t i o n t o t h e p r o g r e s s o f a c o n s t r u c t i o n p r o j e c t? Expert 1 10 Judge, arbitrator and/or adjudicator Lawyer 28 department of contractor department of client Yes No YES: 92% NO: 8% This question served as a filter question to separate those respondents that had dealt with or decided claims that concern the quantification of loss caused by disruption from those that had not. Only those that had were asked to answer further survey questions. This question was worded differently for each of the professional groups surveyed. Survey: How appropriate is the Measured Mile Method? 3

4 Q u e s t i o n 3 : I n r e s p e c t o f t h e m a t t e r s i n w h i c h y o u w e r e i n v o l v e d, h a s t h e m e a s u r e d m i l e m e t h o d b e e n u s e d t o c a l c u l a t e l o s s c a u s e d b y d i s r u p t i o n? Expert 12 Judge, arbitrator and/or adjudicator 25 Lawyer Legal / contract department of contractor Legal / contract department of client Yes No YES: 66% No: 3% This question served as a second filter question to separate those respondents that had dealt with or decided claims that concern the quantification of loss caused by disruption from those that had not. Only those that had were asked to answer further survey questions. Q u e s t i o n : I n a p p r o x i m a t e l y w h a t p e r c e n t a g e o f c a s e s w a s t h e m e a s u r e d m i l e m e t h o d u s e d s u c c e s s f u l l y? 8% 18% 3% 31% 0% to 25% 26% to 50% 51% to 75% Over 75% 3% said the method was used successfully 0% to 20% of the time 31% said the method was used successfully 26% to 50% of the time 18% said the method was used successfully 51% to 75% of the time 8% said the method was used successfully over 75% of the time 7% of respondents said, in their opinion, that the measured mile method had been used successfully less than 50% of the time. Only 26% of the respondents reported a success rate of higher than 50% of the time. This was a lower success rate than expected. Survey: How appropriate is the Measured Mile Method?

5 Q u e s t i o n 5 : I f t h e m e a s u r e d m i l e h a s n o t b e e n u s e d s u c c e s s f u l l y, w h y? Respondents were asked to select from the following options: 13% 25% 1. Method inapplicable to the circumstances 5% 2. Insufficient records to support the analysis 3. No unimpacted period to use as a baseline, i.e. no measured mile % 71%. The unimpacted period was too short and therefore not representative of the productivity that the contract was able to achieve 5. The unimpacted and impacted periods were not comparable 52% Other reasons. 71% said that there were insufficient records to support the analysis. With regard to the measured mile analysis itself: 52% said that there was no unimpacted period to use as a baseline, i.e. there was no measured mile 5% said that the unimpacted and impacted periods were not comparable % said that the unimpacted period was too short and therefore not representative of the productivity that the contractor was able to achieve 25% of the respondents said that the measured mile was inapplicable to the circumstances 13% gave other reasons. Person using the method was not qualified. Almost impossible to demonstrate a directly and completely analogous measured mile, weather, location, type of work, type of resources, etc. Does not consider other events which also impacted productivity. The analysis provided no meaningful inferences. The traditional "Measured Mile" is not appropriate method to measure the impact of disruption. Linkage between the impacts and resulting increase in man hours following the disruptive event is much more relevant. It is far more difficult, but more reliable and defensible. The other (non-actionable) factors that might affect productivity were not comparable or were not isolated from the analysis of disruption. Units of measure were not comparable. Survey: How appropriate is the Measured Mile Method? 5

6 Records are usually the big one. Typically Clients/EPCM's will argue that poor productivity is more about poor contractor management rather than Client disruption. Measured mile works very well with linear construction activities (e.g. pipelines, transmission lines, bulk earthworks) but becomes much harder when there are many activities being undertaken at a particular time and being disrupted in parallel. 0-25% of the time. Is usually considered but not usually proceeded with due to its limitations. The other reasons are essentially an elaboration of the responses that the respondent gave to the question. However, a few of the other reasons reflect issues raised in the case law analysis. 3 Summary This quantitative analysis is based on 228 responses to the questionnaire. 92% of the respondents said that they had dealt with loss caused by disruption. Of those respondents who said they have dealt with, or have decided, issues in relation to disruption, 66% said that the measured mile has been used. However, the overall success rate is low, with 7% of the respondents saying that the measured mile was successful less than 50% of the time (3% saying successful between 0 25% of the time and 31% saying successful between 26% and 50% of the time). The main cause of the low success rate is lack of records (71% of the respondents). However, 52% said there was no unimpacted period to use as a baseline, % said the unimpacted period was too short and therefore not representative and 5% said the comparison periods were not comparable. 13% gave other reasons, which in most cases were an elaboration of their previous responses to the questionnaire. Further, a few of the additional reasons given, which have been set out under Figure 08 above, again tend to reinforce the findings in the qualitative analysis section of this dissertation, for example, the analyst was not qualified to use the measured mile method which is a recurring theme in the case law analysis. Based on the 228 responses received, the measured mile method is inappropriate more often than not. This finding forms the basis for recommended further research. A b o u t t h e A u t h o r Robert Gemmell Manager, Dispute Services Robert is a member of our contract and disputes team and Manager Dispute Services. He is our resident expert in the quantification of delay and disruption claims on major construction and infrastructure projects. He is passionate about his work and clients value his impartial and frank opinions, analytical skills and methodical approach. A highly skilled dispute resolution professional, Robert has undertaken more than 100 appointments as Arbitrator, Adjudicator, Expert Determiner and Expert Witness in disputes ranging from several thousand to several hundred millions of Australian dollars. His dispute resolution expertise is underpinned by more than 20 years experience in the international construction industry working in both professional practice and construction contracting companies in consultancy and hands-on roles on live construction and engineering projects. E Robert.Gemmell@aquenta.com.au P M Survey: How appropriate is the Measured Mile Method? 6