1. Introduction

This article is related to the article on “Remuneration adjustment”, read here.

Here we will delve a little into the type of claim called “plunder and heft”.

This is a well-known term that is not only used in construction law. The term has also found its way into everyday life and is often used when things do not go quite as we intended. Things take longer, demand more of us and that without us really being able to put the “finger” on what it is that is causing the looting and why it is binding (limiting) us.

In the execution of a construction contract, a contractor will from time to time experience that things do not go quite as planned. Disruptions can occur in their own organization, with suppliers the contractor depends on, the weather creates some difficulties, the necessary equipment breaks down, etc. These are examples of “plunder and heft” for the contractor and for which the contractor has the risk.

However, when we talk about “plunder and heft” in a contract law context, it is not this kind of everyday disruption to one's own business that we are referring to.

In this article we will give an account of such “plunder and heft” that entitles the main/general contractor to demand compensation adjustment from the builder, and how the parties should deal in such a situation.

2. Overview of the rules

We take as a starting point the rule introduced in NS 8407 since it is this standard that is used most often today.

3. When is it available “plunder and heft” which gives the contractor the right on remuneration adjustment?

First, there must be a relationship for which the builder has the risk.

It follows from NS 8407, paragraph 34.1.2, second paragraph that the general contractor may 'require a special adjustment of the remuneration (...) resulting from the conditions set out in 34.1.1 and 34.1.2.'.

Paragraph 34.1.1 refers to the rules on changes, while 34.1.2 refers, among other things, to the rules on the physical working surface, unforeseen ground conditions, errors in the builder's design, etc.

The same rule follows from NS 8405 paragraph 25.3, second paragraph letter a where reference is made to NS 8405 paragraph 25.2 which deals with the same conditions as NS 8407 paragraphs 34.1.1 and 34.1.2.

These are topics we have written about under the topics “Amending Orders and Irregular Amendments” and “Builder's benefits”. Therefore, we do not go into this here, but emphasize that so far we have only written articles on matters that we see from experience create disputes between the parties.

As we have already described in the articles about, for example, irregular changes, unforeseen ground conditions, etc., the contractor is obliged to notify the builder “without undue residence” about the current relationship. Secondly, the contractor is obliged to notify whether the relationship will entail a claim for remuneration adjustment and/ or deadline extension.

The requirement for plunder and heft is a requirement that comes in addition, provided that the conditions for this are met.

The second condition for being able to claim remuneration adjustment for plunder and heft is that this (or these) conditions must have interfered with other of the contractor's works.

In other words, the contractor's work with changes, unforeseen ground conditions, etc., must have had negative and cost-driving ripple effects on “other work” that has not been taken into account in the remuneration adjustment of the changes, the unforeseen ground conditions, etc.

Thirdly, the contractor must be able to demonstrate that there is a causal relationship between the relevant relationship for which the builder has the risk, and the disruption of other work.

It can present difficulties because normally there will always be a series of conditions that interfere with the work of the contractor. Often there will be conditions the contractor has the risk of himself and such interference may not be required replaced by the builder. Accordingly, the entrepreneur must “weed out” additional costs arising from conditions that he himself has the risk of.

Fourth, the contractor must have incurred actual additional expenses “due to decreased productivity or disruption of other work”.

4. How to prove that such additional expenses have been incurred?

It has always been a challenge for an entrepreneur to provide documentation that substantiates that the conditions have been met.

Previously, the subcontractor was happy to present his original budgets to document what costs he had originally planned to incur to produce the relevant works that have been disrupted.

Then, these originally budgeted costs were compared with the contractor's line-ups of actual costs. The difference was alleged to be due to conditions the builder had the risk of, and so one demanded this amount replaced as “plunder and heft”.

Until a judgment handed down by the Supreme Court in 2019 (the HAB ruling), the contractor often had a certain proportion of claims for plunder and heft based on such an approach awarded. After the HAB ruling, which we will write about below, the entrepreneur almost stopped winning claims calculated in such a way.

As we come back to, the Supreme Court imposed far more stringent requirements for documentation that it had actually incurred additional expenses for “other work” and similarly stringent requirements to make it probable that the builder bore the risk of the expenditure in question.

Following the HAB judgment, we have received new case law that better explains how to proceed, and this is therefore best addressed by reviewing the case-law, see paragraph 6.

5. Notification obligation

It is very important to stress that if the contractor understands that the circumstances of which the builder has the risk, and which has already been notified, the contractor is imposing plunder and heft on other work, then this must be notified separately and in accordance with the general notification rules.

In NS 8405 and NS 8407, the rule is that the contractor shall notify in writing to the builder's representative and “without undue residence”. If the contractor does not comply with these rules, the consequence is that the claim on plunder and heft will lapse.

In addition, we remind you that the other party must actively invoke — without undue delay — that the other party has given notice too late for the exclusionary effect of late notification to become effective, cf. NS 8407 paragraph 5, third paragraph and NS 8505 paragraph 8, third paragraph.

Although NS 8506 does not contain any exclusionary rules, it must nevertheless be notified within “reasonable time”, cf NS 8516 paragraph 19.4, second paragraph.

6. Jurisprudence

6.1 HAB judgment (HR-2019-1225-A)

The central court decision in terms of plunder and heft was handed down by the Supreme Court in 2019 and is called the “HAB ruling”. This concerned an execution centre where a claim for plunder and heft was made in the amount of £36.5 million.

The entrepreneur had tried to document his productivity loss in several different ways.

For example, the contractor had obtained an expert assessment based on general experience figures for productivity losses as such, but it was not good enough.

It was also not satisfactory to compare actual costs with the contractor's calculated expenses from when he made his offer.

The contractor (HAB) lost completely and failed to comply with any of his claims.

In the judgment note 83, the Supreme Court clearly expressed that contractor is obliged to “demonstrate concretely which work operations were affected by the building conditions and calculate the additional costs this has entailed”.

However, completely unrealistic demands cannot be made, and in note 86, the Supreme Court wrote that “it is not generally required that the exact economic consequences of each individual building relationship have to be demonstrated (...) it may be difficult or impossible to link all the additional costs to individual building conditions. (...) Moreover, in the case of plunders and hefts (...) the overall effect of the building conditions on the contractor's productivity is often in the foreground”.

The Supreme Court therefore admitted that “the final assessment (...) will (...) to some extent have to be based on a discretion” (note 87).

The consequence of the Supreme Court's judgment in the HAB case was therefore that a series of court cases where contractor had based their claim on plunder and heft on the state of law prior to the HAB judgment ended with the contractors losing their claims on plunder and heft.

This lasted until a judgment was handed down in the Borgarting Court of Appeal in 2021, which we describe below. This judgment is often called “Slemdal skole” and involved a general contractor and a total subcontractor.

6.2. “Slemdal skole” judgment (LB-2021-42691)

This concerned a dispute between a general contractor and a total subcontractor where the latter was an electrical contractor.

The general contractor had no in-house production in the project, and more than 50 juxtaposed subcontractors.

There were major delays and the progress plan was revised 43 times, for example.

Total subcontractor submitted a total of 24 notifications of progress discrepancies, as well as claims for remuneration adjustment for plunder and heft.

The general contractor was presumably familiar with the HAB judgment and in order to substantiate his claim, he implemented procedures to obtain documentation that could substantiate the claim for additional expenses for plunder and heft.

In addition to notifying claims in accordance with the provisions of the standard, the general contractor took photographs and prepared periodic progress reports explaining with text and pictures what the additional expenses were incurred and what these expenses were and in other ways obtained timely evidence on an ongoing basis.

This is in order to be able to make it likely that increased expenses were actually incurred on other works as a result of the general contractor's circumstances.

In the effort to document the additional expenses, the actual costs incurred by the total subcontractor were compared with a production calculation that the general contractor had revised after the parties had agreed together on the final progress plan.

In other words, original calculations from the time of the offer were not used as a basis for comparison, cf. HAB judgment.

The total subcontractor also took into account that part of the additional costs was due to its own inefficiency or plunders and heft in its own organization that one has to take on its own mantle. He therefore made an estimate of how much of the additional expenses were due to conditions for which the general contractor himself had the risk, and put forward a claim that the general contractor was responsible for the excess.

It is worth noting that the general subcontractor forwarded the documentation (reports, photos, cost vouchers, etc.) for its periodic partial requirements consecutively to the general contractor. That way, the general contractor was given an opportunity to control while the events were fresh. The general contractor could — if he wished — make his own reports with pictures etc that could be used to substantiate his opinion — to the extent that he would contest the claims of the total subcontractor.

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