Project managment

Time limits and interest payable on late payments

The ICE conditions require the contractor to notify his intention to make a claim ‘as soon as may be reasonable’ but in any case within 28 days of meeting the unforeseeable conditions or cause of delay, or receiving notice of a rate set under a variation order. If the contractor is late in his notification of a claim, he may lose a right to that part of it, which the engineer cannot in consequence investigate properly (Clause 53(5)). When costs are ongoing, the engineer can require the contractor to submit further accounts of his claim at reasonable intervals.
There is no specific time stated when the engineer must come to a decision  concerning a contractor’s claim, nor does he have to make a decision on a claim, which does not give ‘full and detailed particulars of the amount claimed’ (Clause 53(4) and (6)). However, once the engineer finds some payment due in respect of a claim he must certify this payment in the next interim payment to the contractor.

If the engineer decides that some payment is due to a contractor but unreasonably fails to certify it in the next certificate; or if the employer fails to pay part or all of an amount certified for payment by the engineer, the employer has to pay to the contractor ‘interest compounded monthly for each day on which the payment is overdue or which should have been certified’ (Clause 60(7)). The same clause provides that should a matter in dispute go to arbitration, and ‘the arbitrator holds that any sum or additional sum should have been certified by a particular date’ then interest will be payable on it, starting from 28 days after the engineer should have certified the sum. The rate stipulated is 2 per cent above the base lending rate of the bank specified in the Appendix to tender.
It should be noted that this interest is only applicable following a failure by the employer or the engineer. There is no general provision that interest is due for any gap in time between the costs being incurred and an amount being included in a certificate; much less so if any delay is due to a contractor failing to supply details of his claim.

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