{
  "query": "UK construction industry liquidated damages average cost per day 2024 2025",
  "raw_results": [
    {
      "url": "https://www.procore.com/library/liquidated-damages-construction",
      "title": "What You Need to Know About Liquidated Damages in Construction | Procore",
      "content": "For example, the amount must be reasonable. Liquidated damages are not designed to punish contractors, and thus cannot be an amount that could be considered excessive or punitive. For example, $20-$25 per day for each $100,000 of the contract price would be considered a reasonable amount. The owner can’t choose an amount so high that it wouldn’t stand up to a legal challenge. [...] ## What are liquidated damages in construction?\n\nLiquidated damages are funds covering the costs for each day the project continues past the agreed-upon date of completion. These funds are typically deducted from what the owner owes the contractor for the work — eating into already thin profit margins.  \n\n### Qualifying factors for liquidated damages\n\nFor an owner to even be eligible to receive liquidated damages, certain procedural and legal requirements must be met. For starters, liquidated damages are not to be used as a coercive tool. [...] Their purpose is to compensate the owner for real or perceived losses as a result of a project delay, not to punish the contractor. The amount per day must be agreed upon by both parties ahead of time, and specific qualifying provisions have to be met to actually be enforceable.\n\n### Date of substantial completion\n\nOwners tend to favor liquidated damages clauses because they feel they protect them from a project delay, as well as subsequent inconvenience or monetary loss.",
      "score": 0.37772483,
      "raw_content": null
    },
    {
      "url": "https://chambers.com/articles/liquidated-damages-under-the-2025-law-on-construction",
      "title": "Liquidated damages under the 2025 Law on Construction | Article | Chambers and Partners",
      "content": "LIQUIDATED DAMAGES AS PROVIDED FOR IN FIDIC CONTRACT FORMS\n\nFIDIC contracts—particularly the Red Book, Yellow Book, and Silver Book—have long established a benchmark for the application of liquidated damages in cases where contractors breach their obligations regarding construction progress, specifically the Time for Completion (referred to in the Vietnamese versions of FIDIC contracts as the “Thời hạn hoàn thành”). Under these standard forms, delay damages are stipulated as a fixed monetary amount stated in the Contract Data, payable by the contractor to the employer for every day which shall elapse between the relevant Time for Completion and the Date of Completion..( The employer is not required to prove actual damages arising from the delay. [...] In light of the practical challenges encountered by adjudicatory bodies in the resolution of issues related to liquidated damages, Article 86 of the 2025 Law on Construction, in its current form, falls short of providing clear guidance. Once the door has been opened to the application of liquidated damages, the Law on Construction should provide more specific and closely tailored provisions to ensure liquidated damages approximate actual loss as closely as possible. It should also be noted that under FIDIC standard contract forms, when drafting the liquidated damages clauses for delay in construction progress, parties are commonly advised to stipulate liquidated damages as a percentage of the project’s final account value( however, this approach has not proven particularly effective. It [...] \\\\\\\n\nConstruction projects are typically characterized by large investments, complex technical structures, and extended implementation timelines. Any delay in achieving a project milestone may trigger cascading economic losses for project owners, which in some cases can be severe. To mitigate such risks and avoid prolonged disputes over the burden of proving actual damages, the concept of “Liquidated Damages” has emerged as an essential tool of contract risk management.",
      "score": 0.3383618,
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    },
    {
      "url": "https://www.kcl.ac.uk/construction-law/assets/kcl-dpsl-construction-adjudication-report-3.0-2024-update-digital-aw1.pdf",
      "title": "[PDF] 2024 Construction Adjudication in the United Kingdom",
      "content": "Value, causes and categories of claim. The most common value of an adjudication claim in the past year was between £125,000 and £500,000 – a response selected by 42% of individual respondents. Only 4% selected claim values of less than £25,000. 28% stated that the most frequent value of claims in the past year was between £500,000 and £1 million.\nThe two leading causes of disputes in construction adjudication in the past year are inadequate contract administration, at 50%; and lack of competence of contract participants, at 42%. These are followed by exaggerated claims and changes by client, at 30% each; and adversarial industry culture at 25%. [...] On the other hand, the RICS Summary Adjudication procedure was designed for smaller contractors who find dispute resolution unaffordable, even under LVD MAP. It provides: • A qualified adjudicator who delivers a brief decision and reasons within 14 days • A process without site visits • A cost cap of £1000 (excluding VAT). [...] This year’s report further reinforces the crucial role that adjudicators play within the UK construction industry. Their work, often carried out under immense pressure and within stringent deadlines, enables the resolution of disputes efficiently and at a reasonable cost.",
      "score": 0.30056128,
      "raw_content": null
    },
    {
      "url": "https://www.adjudication.org/sites/default/files/KCL_Update_2024_Report.pdf",
      "title": "2024 Construction Adjudication in the United Kingdom",
      "content": "Value, causes and categories of claim. The most common value of an adjudication claim in the past year was between £125,000 and £500,000 – a response selected by 42% of individual respondents. Only 4% selected claim values of less than £25,000. 28% stated that the most frequent value of claims in the past year was between £500,000 and £1 million.\nThe two leading causes of disputes in construction adjudication in the past year are inadequate contract administration, at 50%; and lack of competence of contract participants, at 42%. These are followed by exaggerated claims and changes by client, at 30% each; and adversarial industry culture at 25%. [...] On the other hand, the RICS Summary Adjudication procedure was designed for smaller contractors who find dispute resolution unaffordable, even under LVD MAP. It provides: • A qualified adjudicator who delivers a brief decision and reasons within 14 days • A process without site visits • A cost cap of £1000 (excluding VAT). [...] This year’s report further reinforces the crucial role that adjudicators play within the UK construction industry. Their work, often carried out under immense pressure and within stringent deadlines, enables the resolution of disputes efficiently and at a reasonable cost.",
      "score": 0.27915296,
      "raw_content": null
    },
    {
      "url": "https://www.fenwickelliott.com/sites/default/files/l_liquidated_damages.pdf",
      "title": "[PDF] Liquidated Damages - Fenwick Elliott",
      "content": "Conclusion Liquidated damages are commonly used in the construction industry and standard form contracts typically provide for them. However, when considering whether to include liquidated damages, care should be taken to ensure that the provisions are clear (i.e. what the liquidated damages relate to) and workable, and parties must then follow the contractual mechanism. Huw Wilkins June 2024 Footnotes 1 They are provided for in standard form contracts, such as Optional Clause X7 in NEC4. 2 Dunlop Pneumatic Tyre Co Ltd -v- Selfridge & Co Ltd  A.C. 847.\n3 Cavendish Square Holding BV -v- Talal El Makdessi  UKSC 67.\n4  EWHC 283 (Comm).\n5  EWHC 6 (TCC).\n6 Temloc Ltd -v- Errill Properties Ltd  39 B.L.R. 30.\n7 Baese Pty Ltd -v- RA Bracken Building Pty Ltd (1990) 6 BCL 137.\n8  WASC 246. [...] Historically, the rate of liquidated damages was required to be a genuine pre-estimate of loss.2 More recently, the Supreme Court reviewed the law in this regard and recast the test.3 In doing so, it recognised that a party may have a legitimate interest in enforcing a liquidated damages provision extending beyond the pecuniary compensation for the breach. The Tribunal can therefore look at more than just a comparison of the rate of liquidated damages and the loss actually incurred (for example, in certain circumstances the Tribunal could look at the impact of a delay to a project on the employer’s reputation). In the construction industry, liquidated damages are commonly used to compensate employers for a contractor’s failure to complete the works by the contractual completion date, or a [...] 8  WASC 246.\n9 Cavendish Square Holding BV -v- Talal El Makdessi  UKSC 67.\n10 Robophone Facilities -v- Blank  1 WLR 1428 CA at 1447; Dunlop Pneumatic Tyre Co Ltd -v- Selfridge & Co Ltd  A.C. 847; Cavendish Square Holding BV -v- Talal El Makdessi  UKSC 67; Dunlop Pneumatic Tyre Co Ltd -v- New Garage & Motor Co Ltd  A.C. 79; Eco World – Ballymore Embassy Gardens Company Limited -v- Dobler UK Limited  EWHC 2207 (TCC).\n11 Taylor Woodrow Holdings Ltd & Anor -v- Barens & Elliott Limited  EWHC 3319 (TCC); Buckingham Group Contracting Ltd -v- Peel L&P Investments and Property Ltd  EWHC 1842 (TCC).\n12 Rapid Housing -v- Ealing Family Housing  29 BLR 5.",
      "score": 0.2705165,
      "raw_content": null
    }
  ],
  "formatted": "Source: What You Need to Know About Liquidated Damages in Construction | Procore\nURL: https://www.procore.com/library/liquidated-damages-construction\nFor example, the amount must be reasonable. Liquidated damages are not designed to punish contractors, and thus cannot be an amount that could be considered excessive or punitive. For example, $20-$25 per day for each $100,000 of the contract price would be considered a reasonable amount. The owner can’t choose an amount so high that it wouldn’t stand up to a legal challenge. [...] ## What are liquidated damages in construction? Liquidated damages are funds covering the costs for each day the project continues past the agreed-upon date of completion. These funds are typically deducted from what the owner owes the contractor for the work — eating into already thin profit margins. ### Qualifying factors for liquidated damages For an owner to even be eligible to receive liquidated damages, certain procedural and legal requirements must be met. For starters, liquidated damages are not to be used as a coercive tool. [...] Their purpose is to compensate the owner for real or perceived losses as a result of a project delay, not to punish the contractor. The amount per day must be agreed upon by both parties ahead of time, and specific qualifying provisions have to be met to actually be enforceable. ### Date of substantial completion Owners tend to favor liquidated damages clauses because they feel they protect them from a project delay, as well as subsequent inconvenience or monetary loss.\n\n---\n\nSource: Liquidated damages under the 2025 Law on Construction | Article | Chambers and Partners\nURL: https://chambers.com/articles/liquidated-damages-under-the-2025-law-on-construction\nLIQUIDATED DAMAGES AS PROVIDED FOR IN FIDIC CONTRACT FORMS FIDIC contracts—particularly the Red Book, Yellow Book, and Silver Book—have long established a benchmark for the application of liquidated damages in cases where contractors breach their obligations regarding construction progress, specifically the Time for Completion (referred to in the Vietnamese versions of FIDIC contracts as the “Thời hạn hoàn thành”). Under these standard forms, delay damages are stipulated as a fixed monetary amount stated in the Contract Data, payable by the contractor to the employer for every day which shall elapse between the relevant Time for Completion and the Date of Completion..( The employer is not required to prove actual damages arising from the delay. [...] In light of the practical challenges encountered by adjudicatory bodies in the resolution of issues related to liquidated damages, Article 86 of the 2025 Law on Construction, in its current form, falls short of providing clear guidance. Once the door has been opened to the application of liquidated damages, the Law on Construction should provide more specific and closely tailored provisions to ensure liquidated damages approximate actual loss as closely as possible. It should also be noted that under FIDIC standard contract forms, when drafting the liquidated damages clauses for delay in construction progress, parties are commonly advised to stipulate liquidated damages as a percentage of the project’s final account value( however, this approach has not proven particularly effective. It [...] \\\\\\ Construction projects are typically characterized by large investments, complex technical structures, and extended implementation timelines. Any delay in achieving a project milestone may trigger cascading economic losses for proje\n\n---\n\nSource: [PDF] 2024 Construction Adjudication in the United Kingdom\nURL: https://www.kcl.ac.uk/construction-law/assets/kcl-dpsl-construction-adjudication-report-3.0-2024-update-digital-aw1.pdf\nValue, causes and categories of claim. The most common value of an adjudication claim in the past year was between £125,000 and £500,000 – a response selected by 42% of individual respondents. Only 4% selected claim values of less than £25,000. 28% stated that the most frequent value of claims in the past year was between £500,000 and £1 million. The two leading causes of disputes in construction adjudication in the past year are inadequate contract administration, at 50%; and lack of competence of contract participants, at 42%. These are followed by exaggerated claims and changes by client, at 30% each; and adversarial industry culture at 25%. [...] On the other hand, the RICS Summary Adjudication procedure was designed for smaller contractors who find dispute resolution unaffordable, even under LVD MAP. It provides: • A qualified adjudicator who delivers a brief decision and reasons within 14 days • A process without site visits • A cost cap of £1000 (excluding VAT). [...] This year’s report further reinforces the crucial role that adjudicators play within the UK construction industry. Their work, often carried out under immense pressure and within stringent deadlines, enables the resolution of disputes efficiently and at a reasonable cost.\n\n---\n\nSource: 2024 Construction Adjudication in the United Kingdom\nURL: https://www.adjudication.org/sites/default/files/KCL_Update_2024_Report.pdf\nValue, causes and categories of claim. The most common value of an adjudication claim in the past year was between £125,000 and £500,000 – a response selected by 42% of individual respondents. Only 4% selected claim values of less than £25,000. 28% stated that the most frequent value of claims in the past year was between £500,000 and £1 million. The two leading causes of disputes in construction adjudication in the past year are inadequate contract administration, at 50%; and lack of competence of contract participants, at 42%. These are followed by exaggerated claims and changes by client, at 30% each; and adversarial industry culture at 25%. [...] On the other hand, the RICS Summary Adjudication procedure was designed for smaller contractors who find dispute resolution unaffordable, even under LVD MAP. It provides: • A qualified adjudicator who delivers a brief decision and reasons within 14 days • A process without site visits • A cost cap of £1000 (excluding VAT). [...] This year’s report further reinforces the crucial role that adjudicators play within the UK construction industry. Their work, often carried out under immense pressure and within stringent deadlines, enables the resolution of disputes efficiently and at a reasonable cost.\n\n---\n\nSource: [PDF] Liquidated Damages - Fenwick Elliott\nURL: https://www.fenwickelliott.com/sites/default/files/l_liquidated_damages.pdf\nConclusion Liquidated damages are commonly used in the construction industry and standard form contracts typically provide for them. However, when considering whether to include liquidated damages, care should be taken to ensure that the provisions are clear (i.e. what the liquidated damages relate to) and workable, and parties must then follow the contractual mechanism. Huw Wilkins June 2024 Footnotes 1 They are provided for in standard form contracts, such as Optional Clause X7 in NEC4. 2 Dunlop Pneumatic Tyre Co Ltd -v- Selfridge & Co Ltd A.C. 847. 3 Cavendish Square Holding BV -v- Talal El Makdessi UKSC 67. 4 EWHC 283 (Comm). 5 EWHC 6 (TCC). 6 Temloc Ltd -v- Errill Properties Ltd 39 B.L.R. 30. 7 Baese Pty Ltd -v- RA Bracken Building Pty Ltd (1990) 6 BCL 137. 8 WASC 246. [...] Historically, the rate of liquidated damages was required to be a genuine pre-estimate of loss.2 More recently, the Supreme Court reviewed the law in this regard and recast the test.3 In doing so, it recognised that a party may have a legitimate interest in enforcing a liquidated damages provision extending beyond the pecuniary compensation for the breach. The Tribunal can therefore look at more than just a comparison of the rate of liquidated damages and the loss actually incurred (for example, in certain circumstances the Tribunal could look at the impact of a delay to a project on the employer’s reputation). In the construction industry, liquidated damages are commonly used to compensate employers for a contractor’s failure to complete the works by the contractual completion date, or a [...] 8 WASC 246. 9 Cavendish Square Holding BV -v- Talal El Makdessi UKSC 67. 10 Robophone Facilities -v- Blank 1 WLR 1428 CA at 1447; Dunlop Pneumatic Tyre Co Ltd -v- Selfridge & Co Ltd A.C. 847; Cavendish S"
}