- Jun 7, 2004
- 18,106
- 45,030
True but even the fact that Multiplex had huge compensation to pay when it delivered Wembley stadium almost 2 years late (so much £'s that Multiplex in effect went bust ), the stadium was still delivered late.....so we still need a contingency plan or thought process even if we get compensated
Yes, the problem with charging damages for late completion is that they notoriously don't work. They don't act as an effective incentive. On the minority of occasions when the contractor doesn't drag out a dispute about the damages until you arrive at a commercial settlement just to bring matters to a conclusion, you eventually get to deduct your your money from the final payment. The damages are calculated according to the anticipated costs to the client of the late completion.
What never, ever happens is that the contractor says "I'd better finish that building on time or I'll lose money" and accelerates work on site. They always assume they can squirm out from under the damages through a commercial negotiation and they routinely tell porkies about progress on site, when it's plain to the project manager that the job is running weeks/months behind schedule.