The final account is the document by which the contractor and employer agree the final sum payable under the contract, taking into account the original contract sum, all variations, all loss and expense or compensation events, all liquidated damages or other deductions, and all sums previously paid. In principle, the agreement of the final account marks the end of the commercial relationship in respect of the project. In practice, the final account is one of the most frequent battlegrounds in construction disputes.
Final account disputes arise for a variety of reasons. Variations may have been instructed but not properly valued, or may have been disputed at the time and never resolved. Loss and expense claims may be in dispute as to entitlement, quantum or both. Liquidated damages may have been deducted in circumstances where the contractor disputes the underlying delay. Provisional sums may have been expended in ways that the parties cannot agree. Defective works may have been the subject of contra-charges that the contractor denies.
The starting point for the analysis of any final account dispute is the contract. The valuation provisions of the contract govern the assessment of variations. The loss and expense provisions govern the assessment of additional cost. The defects provisions govern the assessment of contra-charges. The liquidated damages provisions govern the deduction of liquidated damages. A clear and orderly analysis of the issues by reference to the contractual framework is essential to any sensible discussion of the final account.
The contemporaneous records are the second pillar of the analysis. The variations file, the instructions file, the daywork records, the cost records, the programme records and the correspondence are all essential to the assessment of the final account. Where the records are incomplete or inconsistent — as they frequently are on Middle Eastern projects of any complexity — the expert must address the gaps transparently and explain how the analysis has been adjusted to take account of the limitations of the records.
A particular feature of final account disputes is the proliferation of small items. The headline issues — the major variations, the substantial loss and expense claims, the liquidated damages — are usually identified early. But beneath those headline issues lies a long tail of smaller items that, in aggregate, can amount to a very substantial sum. The expert must work systematically through every item, applying the same disciplines to the small items as to the large.
Joint working between the parties' surveying experts is often the most efficient means of narrowing the issues in a final account dispute. Tribunals will frequently direct that the experts meet in advance of the hearing to identify the areas of agreement and disagreement. A constructive engagement at this stage can substantially shorten the hearing and reduce the costs of the dispute, and reflects well on the experts who participate in it.
Our quantity surveying experts at Construction Expert Witness have addressed final account disputes on hundreds of projects across the UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain. We bring rigorous methodology, deep regional experience and a constructive approach to expert engagement that is designed to assist the tribunal in resolving the dispute efficiently and fairly.