Damages claims in construction disputes can take various forms. Contractual provisions often include clauses that provide for liquidated damages (i.e., specific amounts pre-agreed by the parties to compensate for construction defects or delays). Damages claims also often include claims for direct costs associated with specific breaches (e.g., additional costs associated with remedying defective works or mitigating the impact of construction delays). Finally, damages claims may also include compensation for lost profits or lost value. These claims measure the wider financial impact of a breach on the value of the claimant’s investment. This type of damages is one in which the more complex economic issues arise and the expertise of quantum and economic experts is most needed.

In Global Arbitration Review’s The Guide to Construction Arbitration Sixth Edition, Senior Managing Director Richard Hern and Directors Zuzana Janeckova and Clara Segurola explore the key issues arbitration practitioners and quantum experts need to consider when estimating damages in construction disputes. The chapter illustrates sector-specific issues using case studies from the transport and energy sectors and identifies common quantum issues arising in construction disputes across different sectors.