For subcontractors, a quantum expert report should provide independent opinion on the valuation, substantiation and financial assessment of a disputed payment, claim or valuation issue. Where the report is intended for adjudication, the opinion should provide independent quantum evidence on the valuation issue referred, the remedy sought and the calculation advanced in the referral notice.
A quantum expert report with unclear methodology, unsupported assumptions, incomplete records or selective reasoning can increase preparation cost and undermine the reliability and evidential weight of the expert opinion. The opinion is also likely to carry less weight if it does not address contrary records, limits on evidence or the valuation issue actually referred.
The expert’s written instructions should identify the valuation questions to be answered, the documents provided, the assumptions to be adopted and any limits on the expert’s work. If those instructions are unclear, the quantum expert report may answer the wrong valuation question, rely on unstated assumptions or fail to address the valuation issue referred.
This article sets out how to review whether a quantum expert report is ready for use as independent quantum evidence in an adjudication referral. It explains how to check whether the report addresses the instructed valuation questions, applies the relevant subcontract valuation mechanism, identifies the records relied on and explains how the assessed amount has been calculated.
Key Takeaways
- A quantum expert report should answer the expert’s written instructions, not merely justify a claimed amount.
- The report should separate the valuation issue, subcontract valuation mechanism, valuation method, assumptions, records and opinion.
- The expert should identify the instructions, documents reviewed, facts relied on, assumptions adopted and limits on opinion.
- The expert should address missing records or contrary records where they affect the opinion.
- The expert should remain independent and should not become an advocate for the instructing party.
- The report should align with the notice of adjudication, referral notice, dispute and remedy sought.
- Where the quantum expert report does not reconcile the relied-on records, stated assumptions and valuation method with the figures assessed, further substantiation or valuation reasoning may be needed before referral.
Key Definitions
Quantum. The monetary value of a claim, valuation issue, payment sum, loss, expense, adjustment or financial remedy in dispute.
Quantum expert report. A written expert opinion on the monetary assessment of a construction dispute. It may address valuation, measurement, substantiation, financial assessment, payment valuation or final account assessment. It addresses cost causation only where the instructed opinion includes additional cost, loss or expense said to result from an identified event, instruction, breach, delay, disruption or other relied-on matter.
Notice of adjudication. A written notice by a party to a construction contract stating an intention to refer a dispute arising under the contract to adjudication. Where the Scheme applies, the notice must briefly identify the dispute, the parties involved, where and when the dispute arose, the redress sought, and the names and addresses of the parties.
Referral notice. The written referral of the dispute to the adjudicator. Where the Scheme applies, the referring party must refer the dispute in writing to the adjudicator not later than seven days from the date of the notice of adjudication. The referral notice must be accompanied by copies of, or relevant extracts from, the construction contract and the documents relied on. The referring party must send those documents to every other party to the dispute at the same time.
Cost causation. The causal link between the event, instruction, breach, delay, disruption or other matter relied on and the additional cost, loss or expense claimed.
Loss and expense. A contractual claim for monetary recovery of loss or cost incurred because of a matter for which the contract provides financial compensation.
Disruption. Reduced productivity or reduced working efficiency in carrying out construction work.
Why Report Discipline Matters
Quantum expert reports assist the adjudicator and the parties when they provide reasoned independent opinion on the monetary assessment of the valuation issue referred.
The adjudicator should be able to follow the expert’s reasoning from the instructions and relied-on records to each figure assessed.
The reader should be able to distinguish the valuation issue, facts relied on, assumptions adopted, records reviewed, method applied and expert opinion reached.
The quantum expert report should explain each figure that the expert has been instructed to assess. It should show how each assessed figure follows from the applicable valuation basis, relied-on records, stated assumptions and calculation.
Schedules and appendices should support the opinion, not replace it.
The report narrative should explain how the expert has calculated each assessed figure by reference to the applicable valuation basis, valuation method, relied-on records and stated assumptions.
Where the instructed opinion includes additional cost, loss or expense said to result from an identified event or matter, the report should also explain cost causation.
The quantum expert report also needs to be usable within the compressed adjudication timetable. The adjudicator and responding party should be able to identify the opinion given, the records relied on, the assumptions adopted and the calculation used for each assessed figure.
The quantum expert report should contain enough detail for the other party and the adjudicator to follow each calculation relied on from the records and stated assumptions to the figure assessed.
Adjudication Route and Referral Scope
The Housing Grants, Construction and Regeneration Act 1996 is commonly referred to as the Construction Act. Section 108 gives a party to a construction contract a statutory right to refer a dispute arising under the contract to adjudication.
The adjudication provisions in the Scheme for Construction Contracts may apply where the subcontract adjudication provisions do not comply with the statutory requirements. The adjudication procedure, timetable and referral requirements should be confirmed before the quantum evidence is finalised.
The quantum expert report should be reviewed to confirm that its instructed questions, assumptions, valuation method, calculations and conclusions correspond with the dispute described in the notice of adjudication and the case advanced in the referral notice. The opinion should address the remedy sought, the valuation issue referred and the documents relied on.
If the remedy sought is payment, the report should explain the sum claimed and the payment basis relied on. If the remedy sought is a valuation decision, the report should explain the valuation basis, records and calculation.
The practical review question is whether the quantum expert report gives independent opinion on the valuation issue described in the notice of adjudication and the case advanced in the referral notice, and whether that opinion corresponds with the remedy sought.
What a Quantum Expert Report Should Explain Before Adjudication
A quantum expert report should identify the questions the expert was asked to answer. It should also state the documents and records reviewed, assumptions adopted, calculations made and the opinion reached.
The report should keep factual material, assumed facts, valuation analysis and expert opinion separate.
The instructions should identify the expert opinion required, the issues to be valued, the documents provided and any facts or assumptions the expert is asked to adopt.
The report should then identify the documents reviewed, such as applications, change records, subcontract documents, correspondence, cost records, notices and payment records.
The report needs to state the facts and assumptions that affect the valuation. That becomes especially important where the valuation depends on disputed progress, missing records, provisional quantities or a stated subcontract interpretation.
The valuation method should be selected by reference to the valuation issue referred, the subcontract valuation mechanism, the valuation question and the records available. Depending on those matters, measured work, subcontract rates, fair valuation, cost records or loss and expense analysis may be appropriate.
Where the instructed opinion includes additional cost, loss or expense said to result from an identified event or matter, the quantum expert report should explain why that cost is attributable to the relied-on event or matter rather than to unrelated project cost.
The conclusions should be precise. A reasoned report explains the amount assessed, the calculation and valuation reasoning, and any qualifications that affect the reliability of the assessment.
CPR Part 35 and Practice Direction 35 do not govern adjudication as such. However, the same disciplines remain useful where a report may later be scrutinised in court or arbitration: clear instructions, objective reasoning, disclosed assumptions, limits on opinion and independence.
Valuation Evidence and Supporting Records
Contemporaneous records usually carry significant evidential weight in quantum assessment. They can show the work carried out, the timing of relevant events, the basis of any change, the quantities recorded, the costs incurred, the payment position and the value assessed.
Useful records may include:
- change instructions;
- correspondence;
- cost ledgers;
- daywork sheets;
- pay less notices;
- payment applications;
- payment notices;
- photographs;
- progress records; and
- subcontract documents.
The quantum expert report should explain the purpose of each record category relied on, proportionate to the valuation issue and assessed amount. Some records may evidence the work carried out. Others may support quantity, rate, cost, payment notice position, receipt, chronology or assumptions.
Where a quantum expert report is used in a notified sum dispute, it should address the payment mechanism, payment application, payment notice, pay less notice position, service evidence and sum claimed.
For valuation disputes, the report should explain the valuation basis, source records, calculation and any assumptions affecting the assessed amount.
The quantum expert report should explain the weight given to the records relied on. A structured chronology can identify which records evidence the work carried out, which records support the assessed value and which records explain disputed assumptions.
For delay or disruption costs, the quantum expert report may also need programme analysis, productivity records and cost causation evidence.
The report should not assume that the adjudicator can fill gaps in the reasoning. It should explain how the assessed amount is derived from the records and assumptions relied on.
Independence, Assumptions and Limits
The expert’s role is to give an independent opinion within their expertise. The expert should not become the party’s advocate or omit matters that affect the opinion.
Expert report discipline distinguishes independent opinion from advocacy. The report should identify instructions and assumptions. It should state the expert’s independence position, disclose any relevant conflict and state limits on opinion clearly.
The report should address records that affect the opinion, including records that reduce, qualify or contradict the amount assessed. A report that ignores contrary records may reduce the weight given to the opinion.
Assumptions should be easy to find. If the expert assumes a valid instruction, an instructed change, an incurred cost or a complete record, the report should say so.
Each assumption that affects the valuation opinion should be linked to the valuation issue it affects. The report should explain whether the assumption affects quantity, rate, causation, period, cost or calculation.
The report should state the limits of the opinion. Missing records, unresolved facts or matters outside the expert’s scope may qualify the opinion.
Where records are missing or facts are unresolved, the report should explain how that affects the valuation opinion. The limitation may affect the amount assessed, the reliability of the assessment or an alternative valuation range.
Clear assumptions and limitations are important in quantum expert work in adjudication. A report that overstates certainty can be less persuasive than a report that identifies the limits and explains the valuation options.
Practical Checklist
- Confirm the dispute, remedy and valuation question before the expert report is started.
- Check the subcontract, adjudication provisions, timetable, referral requirements and any amendments.
- Confirm whether the expert has stated the independence position, disclosed any relevant conflict and identified any limits on the role.
- Give the expert clear written instructions identifying the opinion required and the issues to be valued.
- Provide the subcontract, notices, applications, payment records and correspondence.
- Check that the report separates facts, assumptions, valuation analysis and expert opinion.
- Check that the quantum expert report explains the valuation issue, subcontract valuation mechanism, valuation method and substantiation. Where the instructed opinion includes additional cost, loss or expense said to result from an identified event or matter, check that the report also explains cost causation.
- Check that each assessed figure can be followed from the relied-on records, stated assumptions and calculation.
- Check whether the report addresses contrary records, missing records and their effect on the opinion.
- Ask the expert to state assumptions, exclusions and limits on opinion.
- Confirm that the report aligns with the notice of adjudication and referral notice.
- Decide whether the quantum expert report is ready for use as independent quantum evidence in the referral, or whether further substantiation is needed first.
Common Mistakes
- Treating the expert report as a valuation schedule. The adjudicator needs reasoning, not only totals.
- Asking the expert to justify a predetermined claim value before reviewing the supporting records, valuation method and assumptions. That can undermine independence and credibility.
- Assuming cost causation follows from the valuation. Where the instructed opinion includes additional cost, loss or expense said to result from an identified event or matter, the quantum expert report should explain cost causation separately.
- Failing to separate fact, assumption and opinion. This can make it difficult for the adjudicator to understand what the expert has treated as fact, what the expert has assumed and what opinion the expert gives.
- Failing to explain the effect of assumptions. Assumptions that are not linked to quantity, rate, period, cost or calculation can reduce the weight given to the opinion.
- Using selective records. A report that ignores contrary records may undermine independence or reduce the weight given to the opinion.
- Leaving the quantum expert report disconnected from the notice of adjudication and referral notice. The opinion should correspond with the valuation issue, remedy and documents actually referred.
- Instructing the expert too late. Late instruction can leave insufficient time to identify evidential, valuation, assumption, missing records or cost causation issues before adjudication.
ICRS View
A quantum expert report should be reviewed before service of the notice of adjudication. The review should confirm whether the opinion, assumptions, records and calculations can be understood within the compressed adjudication timetable.
Where the instructed opinion includes additional cost, loss or expense said to result from an identified event or matter, the review should also confirm whether cost causation is explained.
The review should:
- identify the valuation questions the expert must answer;
- review and reconcile subcontract records, payment records, change records and cost evidence;
- separate the valuation issue, subcontract valuation mechanism, valuation method and substantiation, and address cost causation where the instructed opinion includes additional cost, loss or expense said to result from an identified event or matter;
- check that the report separates facts, assumptions, valuation analysis and opinion;
- check that contrary records and limitations are addressed; and
- decide whether the quantum expert report is ready for use as independent quantum evidence in the referral, or whether further evidence, substantiation, assumption clarification or valuation reasoning is needed.
That sequence matters because quantum expert reports are not merely supporting documents. They should explain the evidential link between project records and the assessed amount advanced in the adjudication.
The central review question is not the length of the report or the volume of appendices. The question is whether the adjudicator can follow the expert’s opinion from the instructions, relied-on records and stated assumptions to the valuation method, reasoning and assessed amount.
A properly prepared quantum expert report identifies the limits of the evidence, explains the valuation method and shows how the expert has calculated the assessed sum.
Frequently Asked Questions
- What does a quantum expert do in adjudication?
A quantum expert assesses the financial value of the disputed claim, valuation issue or payment sum. The opinion may address measured work, change valuation, loss and expense, interim payment valuation or final account valuation. Its scope depends on the instructions, the dispute referred and the records available. It should also explain the records, assumptions and valuation reasoning supporting the assessed amount.
- What should written instructions to a quantum expert include?
Written instructions should identify the opinion required, the valuation questions to be answered, the documents and records provided, the facts or assumptions the expert is asked to adopt and any limits on the work. Clear instructions help the report answer the dispute referred.
- What assumptions should a quantum expert report identify?
The report should identify assumptions that affect facts relevant to entitlement, quantity, rate, causation, period, cost or calculation. It should also explain how each assumption that affects the valuation opinion changes the assessment.
- How should a quantum expert report deal with missing records?
The report should identify missing records and explain how they affect the opinion. Missing records may affect the assessed amount, the reliability of the assessment or any alternative valuation range.
- Can a quantum expert report rely on schedules alone?
No. Schedules and appendices can support the opinion, but they should not replace reasoning. The report should explain how each assessed figure has been calculated by reference to the valuation basis, relied-on records and stated assumptions.
- Is quantum expert adjudication work the same as court expert evidence?
No. A quantum expert report for adjudication is not the same as court expert evidence governed by CPR Part 35 and Practice Direction 35. Those rules do not govern adjudication as such. Independence, clear assumptions and transparent reasoning still matter, and the report may be scrutinised if the same valuation issues are later pursued in court, arbitration or another final dispute process.
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