[Direct answer]In the Beijing area, the appraisal of project cost should be submitted to the court or arbitration tribunal in writing during the litigation or arbitration proceedings, stating the appraisal matters, scope, and basis. The court will randomly select or the parties will jointly select a qualified cost appraisal institution to conduct the appraisal. The key is to first prepare the appraisal materials such as contracts, change orders, drawings, quantity confirmation forms, and payment vouchers, and pay the appraisal fee on time. According to the provisions of the Civil Procedure Law of the People's Republic of China (amended on September 1, 2023) on appraisal, the parties may apply for appraisal on specialized issues related to fact-finding. Article 30 of the Interpretation of the Supreme People's Court on Legal Issues Concerning the Trials of Construction Contract Disputes (Law Interpretation [2020] No. 25, effective from January 1, 2021) stipulates that if the parties have disputes over the project cost and the court deems it necessary to conduct an appraisal, the court shall explain this to the party who bears the burden of proof. If the party refuses to apply for an appraisal, pay the fee in advance, or refuse to provide materials after being explained, the party shall bear the legal consequences of failing to provide evidence. The timing of application and the organization of materials directly affect the outcome, and reference can be made to the relevant provisions.Property transactions and construction projectsColumn.

1. Problem background and typical scenarios

Such demands are commonly seen in several situations: First, after the project is completed, the employer defaults on the project payment, and both parties hold different opinions on the completed project quantity and pricing standards, making it impossible to settle the accounts on their own; Second, the contract does not clearly stipulate the basis for settlement, or it stipulates that "the audit conclusion shall prevail", but the audit is delayed for a long time; Third, there are numerous change orders during the construction process, but not all of them are signed and confirmed, making it impossible to reconcile the accounts after completion; Fourth, there are disputes over whether the additional items in fixed-price contracts can be adjusted; Fifth, the project is halted midway, and the completed part is intertwined with the losses of the halted and idle work, which need to be appraised together. When the Beijing District Court tries construction project cases, it usually first reviews whether the settlement basis stipulated in the contract can be directly identified. For those that can be calculated on their own, the court is generally reluctant to initiate appraisals. For those that do require appraisals, the court has higher requirements for the scope of the application and the materials provided.

II. Key points of dispute

The first focus is whether it is necessary to conduct an appraisal for the project quantities that have already been settled in an agreement or confirmed through a reconciliation between the parties. If one party requests a re-settlement or re-appraisal, it will generally not be supported. The second focus is to determine the scope of the appraisal, which should focus on the disputed parts to avoid general appraisals of non-disputed costs, leading to higher costs and longer timeframes. The third focus is the authenticity of the appraisal materials. Materials that have not been cross-examined cannot be used as the basis for the appraisal, and the missing parts of the materials shall be allocated according to the burden of proof. The fourth focus is the validity of unilaterally commissioned appraisals. If the other party has sufficient evidence to refute it and applies to the court for a re-commissioning of the appraisal, it shall be permitted. The fifth focus is how to price the additional items beyond the risk scope of a fixed-price contract. The sixth focus is whether the losses of work stoppages and idle time, as well as interest, should be included in the same appraisal. The seventh focus is the cross-examination of the appraisal opinions and the appearance of the appraisers in court. Specific determinations shall be based on the current effective laws, regulations, and judicial rulings. The contractual terms designed by the employer and the construction enterprise can be referenced for this purpose.Business and contract disputes in enterprisesColumn.

III. Professional analysis by Henglue Lawyers

Based on the practical experience of our firm in handling lawyer-represented disputes over project payments, the outcome of the appraisal process is often determined in the pre-application stage of material preparation. Common scenarios include construction companies neglecting signing management documents and confirming changes only verbally or via WeChat, resulting in unpriced items during appraisal. Courts tend to place great emphasis on appraisal opinions, as these often have a significant impact on the outcome. Therefore, defining the scope of appraisal is more critical than the litigation itself. Omitting items such as suspension-of-work losses and interest from the scope of appraisal makes it difficult to rectify later. Common pitfalls include: realizing the need for appraisal only at the trial stage, leading to delayed proceedings due to late applications; submitting drawings and signing documents to the appraisal institution without cross-examination, subject to procedural challenges from the opposing party; refusing to prepay appraisal fees being interpreted as waiving the right to present evidence; and signing off on the preliminary appraisal opinion without verifying the pricing basis item by item. The usual practice of our firm's lawyers is: preparing a dispute cost list before appraisal application, corresponding to each piece of evidence and defining the minimum scope of appraisal; following up on pricing guidelines throughout the appraisal process; organizing technical verification and written objections during the preliminary stage, and, if necessary, requesting the appraiser to attend the trial for cross-examination.

IV. Practical suggestions and legal basis

Action suggestions: First, systematically organize the construction contracts and supplementary agreements, bidding and tendering documents, drawings, change orders, work quantity confirmation forms, meeting minutes, correspondence, and payment records before suing, and organize them chronologically; Second, submit a written appraisal application to the court within the evidence-gathering period, clarifying the appraisal items and scope; Third, pay the appraisal fees on time, cooperate with on-site inspections, and provide supplementary materials; Fourth, after receiving the appraisal opinion, carefully cross-examine it, raise written objections to the pricing basis and fee charging standards, and request the appraiser to appear in court; Fifth, claim interest on the unpaid portion and refer to the recovery path for referenceCreditor's rights and debts, and enforcement casesColum. In terms of legal basis, the Civil Procedure Law of the People's Republic of China (amended on September 1, 2023) stipulates the right of parties to apply for appraisal and the requirements for cross-examination of appraisal opinions; Articles 30 to 32 of the Interpretation of the Supreme People's Court on Legal Issues Concerning the Trials of Disputes over Construction Contracts (Law Interpretation [2020] No. 25, effective since January 1, 2021) clarify the rules for appraisal interpretation, the validity of unilateral commissions, and the initiation of appraisal procedures; Article 807 of the Civil Code of the People's Republic of China (effective since January 1, 2021) grants contractors the right to priority compensation for project prices; and the Code of Appraisal for Construction Project Costs (GB/T 51262-2017, effective since March 1, 2018) stipulates the procedures and technical requirements for appraisal.

5. Henglue Law Firm's Advice

Risk Alert: First, the appraisal fee is charged based on the construction cost, which often amounts to tens of thousands of yuan or even more. Before applying, you should assess whether the amount in dispute is worth a full appraisal and try to narrow the scope as much as possible. Second, the burden of proof lies with the party claiming the project payment. If the materials are incomplete, it's better to first supplement the evidence and then apply. Third, the appraisal period usually lasts several months, plus the trial period, so the overall time cost should be estimated in advance. However, the application timing should not be delayed any longer. Fourth, the appraisal opinion is not infallible. Disputes over the pricing basis and fee calculation errors should focus on professional details. It is recommended to have a lawyer who is proficient in both costing and litigation to coordinate the whole process, and if necessary, to seek legal help through legal channels.Beijing Henglu Law FirmVisit the official website to learn about our service experience in the construction industry.

VI. Frequently Asked Questions

Q1: Can I win the lawsuit against the delay in payment of project funds?

Whether support can be obtained depends on the evidence of contract performance and the basis for settlement. If there are complete visa changes, work quantity confirmation forms, reconciliation records, or acceptance materials, the probability of obtaining support is higher; if the basis for settlement is unclear, the amount owed can be determined through cost appraisal. The court directly determines the undisputed parts and takes the appraisal opinion as the main reference for the disputed parts. Therefore, it is crucial to organize the contract and visa evidence before suing and to define a reasonable scope for appraisal. It is recommended that lawyers first evaluate the evidence chain before deciding on a strategy.

Q2: What materials are needed for cost appraisal?

The following materials should be prepared: the construction contract and supplementary agreements, the bid-winning notice, and the bidding and tendering documents; a complete set of construction drawings and completion drawings; change orders, confirmation of work quantities, and acceptance records of concealed works; meeting minutes, correspondence, and supervision logs; payment vouchers and reconciliation records; and relevant proofs of work stoppages and idle time. The materials must be subject to cross-examination before being used as appraisal evidence. Organizing and cataloging them in chronological order in advance can significantly shorten the appraisal cycle and improve the completeness of pricing.

Q3: What is the approximate cost of a cost assessment, and who should bear it?

The appraisal fee is generally charged according to the proportion of the project cost or the amount in dispute, ranging from tens of thousands of yuan to hundreds of thousands of yuan. The applicant pays it in advance, and the court ultimately determines the burden based on the appraisal results and the proportion of responsibility. Usually, the losing party or the party at fault bears a larger share. Narrowing the scope of the appraisal and only commissioning it for the disputed parts can effectively control the cost. Before applying, the applicant should compare the cost with the expected recovery amount to avoid paying high appraisal costs for small disputes.

Q4: How long does it take to complete the appraisal and litigation process altogether?

The cost appraisal usually takes several months, and it will take even longer for complex projects or materials that need to be repeatedly corrected. After the appraisal is completed, the first-instance ordinary procedure generally does not exceed six months, and the second-instance procedure takes about three months. Overall, it usually takes about a year from applying for the appraisal to the first-instance judgment, and the period involving inspection, supplementary cross-examination, or multiple rounds of objections will be even longer. Submitting the application and complete materials as early as possible is the most effective way to shorten the timeframe.

Q5: What are the consequences of not applying for an appraisal?

According to Article 30 of the Interpretation of the Supreme People's Court on Legal Issues Concerning the Trial of Disputes over Construction Contracts, if the parties have disputes over the project cost and fail to apply for appraisal, pay the appraisal fees in advance, or refuse to provide relevant materials after the court's explanation, they shall bear the legal consequences of failing to provide evidence. The court may determine the project payment based on the existing evidence or in accordance with the contract provisions, and the claimant is likely to suffer losses due to the unclear amount. If there are indeed disputes, the parties should apply for appraisal in a timely manner, and the relevant procedural points can be referred to for reference.Real estate transactions and construction projectsColumn.

The above questions and answers are mainly based on the judicial practice in Beijing. There may be differences in the adjudication guidelines in other regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Legal services for real estate transactions·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.