Construction Dispute Trends, An Insight
A recent industry report discussed trends in construction dispute resolution over the past 5 years, providing insight and explanation into the causes and resolution methods of disputes.
The research found that not only had the disputes increased in average value from £22 million in 2010 to £34 million in 2014; a dramatic increase of 54% in just 4 years, but they had also increased in the length of time taken to resolve the dispute. The average time taken to resolve disputes in 2010 was 9 weeks, however by 2014 it was taking 13 weeks; 44% longer.
The combined pressures of a recovering industry are having an adverse impact on contractors, and the effects of tenders priced low just following the 2008 financial crisis are meaning that contractors are feeling the squeeze of tight margins along with the rising global cost base. The scarcity of labour and professional staff is quickly becoming a problem as the industry recovers and contractors don’t have the level of skilled labour to fulfil the work required.
In the UK, the top causes of construction dispute included failure to administer the contract properly, improperly drafted or incomplete unsubstantiated claims, errors and omissions in the contract document, failure to understand or comply with the contract obligations and failure to make interim awards on extensions of time and compensation.
All of the above issues can be easily and effectively avoided through the instruction of specialist contract and risk management professionals.
It was detailed in the report that the factors having the greatest significance in avoiding a construction dispute included proper contract administration, accuracy of contract documents and fair and appropriate risk and balances in the contract.
Kenzie Group’s Project Services division can aid with the drawing up and administration of your contract, ensuring that the requirements of the contract is met and that any claims for extensions of time or monies are properly drafted and substantiated. In the event that you do become involved in a dispute, Kenzie’s Dispute Resolution division can review your contract and prepare, defend and negotiate claims on your behalf during the adjudication, arbitration or litigation process.