Size of construction disputes drops by half

Aaron Morby 3 weeks ago
Share

The average value of construction disputes in the UK fell by 47% last year as the industry started to make headway with early resolution of problems on contracts.

According to analysis of global disputes, the UK leads the way in dispute resolution, typically with low dispute values and quick resolution times, compared with global averages.

The UK takes the shortest average length of time to solve a dispute – 12.8 months. Although, this is 28% longer than last year and consistent with the global trend, whereby disputes are taking longer on average to resolve.

The analysis by consultant Arcadis shows contractors are now seeking to resolve contractual disputes as they arise rather than letting them build up into large final account rows.

The report uncovered a reduction in the use of adjudications and an increase in negotiation as the preferred method of dispute resolution.

This could be after a Court of Appeal ruling reducing the use of ‘smash ‘n’ grab’ adjudications, said Arcadis, or concerns about the growing cost of the adjudication process and a tendency for significant extensions to the prescribed 28-day statutory period for a decision.

Adrain Bell, partner at legal firm CMS Cameron McKenna Nabarro Olswang, said: “Parties are now generally preferring to try to resolve disputes as they arise contemporaneously during a project and/or to split disputes into more manageable bite-sized chunks.

“It is not a sign, unfortunately, that the UK construction industry is becoming any less contentious.”

He said that the drive to resolve rows earlier was being supported by the drafters of standard form contracts.

“Many of these contracts now contain elaborate provisions to ensure the early notification of claims and regimes that facilitate early discussion of them between the contracting parties,” said Bell.

“They also support rapid recourse to a third party neutral if their intervention is required.”

But with standard contract forms becoming longer and more complex, failure to properly administer the contract is the primary cause of disputes.

Gary Kitt, Head of UK Contract Solutions at Arcadis, said:  “In some cases, it could be argued construction contracts are simply too complex for administrators to understand, and better training for everyone involved would go some way towards avoiding disputes as they arise.

“However, our results show the UK to be a world leader in effective avoidance and mitigation strategies.

“As we continue to transition towards greater use of digital technologies like BIM and 4-, 5- or 6D modelling, we are likely to see an improvement in risk allocation much earlier on in the process. This could help all parties to collaboratively resolve any difficulties before cost and time pressures start to escalate.”

Latest news

Council parts company with Kier after road cost row

New contractor hunt starts after dispute over £26m project estimate
20 hours ago

Stricken fit-out firm bought out of administration by rival

Dimension shopfitting hit by woes of retail and dining sectors
10 hours ago

Killed track workers “unaware” of train until it hit them at 50mph

At least one victim was wearing ear defenders
16 hours ago

Piling specialist Van Elle issues another profit warning

Ground engineering giant also dampens hopes of recovery this year
19 hours ago

Construction’s best performing “ultra sites” revealed

Considerate Constructors Scheme reveals supply chain excellence winners: Full list
20 hours ago

Latest winners unveiled for £2bn Severn Trent water work

Barhale/Doosan JV lands another place on AMP7 lots
1 day ago

Further redundancies at failed Welsh contractor

Trade debt owed by Jistcourt due to be revealed next month
1 day ago

Bid race starts for £17m Canterbury link road

Sturry Link Road from A28 to A291 will include a 250m long viaduct
2 days ago

More contractors suspended from Prompt Payment Code

Galliford Try, Ferrovial and Alun Griffiths among firms not paying on time
3 days ago

Track maintenance crash reveals design flaws in rail kit

Driver of road-rail ballast distributor could barely see track
2 days ago

Lendlease names new London construction chief

Promotion for finance head Claire Pettett
3 days ago

“Brexit fatigue” sees surveyors report construction output grow

RICS says fed-up industry just trying to get on with daily life despite the dithering of politicians
2 days ago

Plans go in for 40-storey tower in Docklands

300 construction jobs will be created building 400 bedroom hotel and 279 serviced apartments
2 days ago

Post-Grenfell building and fire safety changes ‘too slow’

MPs slam Government for unacceptable delay in reforming building regulations
2 days ago

Plan to expand Sheffield Olympic Legacy Park

Developer Scarborough Properties to drive development of 750,000 sq ft of business space for sport and health
2 days ago

Boost your online presence – join the Enquirer Directory

Site for suppliers and buyers showcases products, services and latest stories
1 year ago

Construction restructure costs Galliford Try £10m

Average group net debt rises to £187m after year of writedowns
3 days ago

Six climate activists arrested at concrete plant

Police chief warns construction companies they will be targeted during week of action
3 days ago

Civils and concrete specialist OHOB delivers £27m profit

O’Halloran & O’Brien builds revenue to £300m after expanding from south east base into the Midlands
3 days ago

Worker killed on Asda extension site

Victim "hit by digger bucket" in site tragedy
3 days ago

Leeds Merrion Centre 17 storey office block approved

New office block in shopping centre will cost over £50m to build
3 days ago

£17m Blackpool hotel project out to bid

Muse invited bids for Talbot Gateway scheme Holiday Inn
3 days ago

Countryside wins £400m London Camden Lock estate rebuilds

Work could start on 700-home estate rebuild late next year
4 days ago

Contractor fined for ignoring site welfare order

Manchester firm failed to provide decent facilities for workers
3 days ago

Murphy suffers £5.8m loss

Revenue up 4.4% to £781m driven by transport and power projects
4 days ago

London Mayor uproots Tulip Tower plan

Sadiq Khan blocks 305m skyscraper plan despite city planners' approval
4 days ago

Third Van Elle board director exits

John Foster, group commercial director, departs six months after joining piling specialist
4 days ago

Hunt starts for partner to deliver £1.5bn Wales schools plan

Welsh Government is looking for partner for new public private schools delivery model
4 days ago

HS2 unveils plans for “people mover” on new viaduct

2.3km route will transport people to Birmingham Airport
4 days ago

Manager merry-go-round causing mayhem for contractors

Construction bosses walk-in to new jobs no matter how poor their track record is
4 days ago

Contractor services