Size of construction disputes drops by half

Aaron Morby 5 years 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

Police ban mobile cranes from roads over Easter

Plant hire bosses livid as forces across the country extend abnormal load embargoes
2 hours ago

Director jailed for exposing workers to asbestos

Ten tonnes of asbestos insulating board stripped out by unqualified workers
6 hours ago

Site labour rates start rising again

Industry's biggest payroll firm says "it feels like things could be turning round"
11 hours ago

Council finds extra £33m for Buckinghamshire link road

South East Aylesbury Link Road costs soar by nearly 30% to £147m
10 hours ago

Quartet win £490m North West & Central railway works deal

Skanska, Kier, Octavius Infrastructure and Story Contracting bag major projects deal
11 hours ago

Unite Students plans first major mixed-use scheme

Developer's first mixed BTR and PBSA project to be built in Edinburgh
1 day ago

Galliford Try names new finance director

Rentokil's Kris Hampson joins contractor to replace Andrew Duxbury
12 hours ago

Council boss hits out at bat threat to £274m road job

Natural England could scupper scheme due to be built by Ferrovial
12 hours ago

Hydrogen-fuelled diggers to be allowed onto highways

Government to raise barrier to widespread use of hydrogen fuelled plant in construction
1 day ago

Plans in for £118m Government hub in Darlington

Work pencilled to start later this year on new home for 1,450 civil servants
1 day ago

New contractor highlights Henry Construction jobs on website

New firm lists jobs by failed contractor to show its experience
1 day ago

Contractors line up for £2.6bn Anglian Water AMP8 deal

Eight big names land places on pioneering @one Alliance
2 days ago

McAleer & Rushe bags first major later living project

Work to start this month on 167-flat Royal Tunbridge Wells project
1 day ago

Kier starts first all-electric prison houseblock job in Kent

Next-generation fully electric T60 prison houseblock to be built at HMP Elmley
1 day ago

Keepmoat sees better times ahead in housing market

Profits dip in 2023 despite construction of record number of new homes
1 day ago

Vistry signs partnership deals for 1,900 mixed tenure homes

West Sussex former airfield and Newmarket sites to break ground
2 days ago

Turnover at Wates tops £2bn for first time

Construction division exceeds £1bn turnover as average contract value hits record high of £48.3m
2 days ago

L&G looks to sell Cala Homes in exit from house building

Insurance giant reported to be preparing to offload 3,000 homes-a-year developer
3 days ago

Multiplex profit almost trebles as margin hits 5.5%

Revenue jumps 20% to £675m as big London scheme complete
2 days ago

TopHat puts plans to open huge Corby factory on hold

Advanced manufacturing facility was due to employ 1,000 people
2 days ago

Laing O’Rourke lands Calderdale hospital job

Enabling works to start by the end of this year at West Yorkshire site
2 days ago

Go-ahead for £475m Sunderland film and TV studios

Work to start this year on first phase Corwn Work studios
2 days ago

Willmott Dixon set for £20m Stockport Community Hub

Planning decision expected in June on Marple leisure and health clinic project
2 days ago

Police hunt for blundering dumper truck thief

Raider drove into a fence before getting stuck on a bank
2 days ago

Beattie Passive files administration notice

Passivhaus pioneer has been in business for more than ten years
3 days ago

McAlpine set for £50m space and tech centre

Northumbria Uni sign pre-con deal for new satellite research hub
3 days ago

VolkerFitzpatrick seals £34m Kent road viaduct

Work to start next year on Sturry Link Road near Canterbury
3 days ago

Eight win £600m Scottish civil engineering framework

Balfour, Farrans, Graham and Morgan Sindall win major works lot
3 days ago

Site engineer crushed to death by excavator

22-year-old victim died just months after graduating from university
5 days ago

NG Bailey fined £135,000 after hospital site death

Worker died after striking overhead beam while navigating a mobile elevating work platform
6 days ago

Contractor services