Size of construction disputes drops by half

Aaron Morby 5 months 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

Contractors rally to help Clugston staff facing the axe

Trade body calls up firms to offer laid off staff jobs in run up to Christmas
6 hours ago

Clugston files for administration

Hundreds of jobs at risk as financial crisis hits regional contractor
19 hours ago

London Resort reveals next generation theme park designs

Developer hopes to start construction in 2021
10 hours ago

Historic Liverpool building refurb now on third fit-out firm

Overbury brought in to replace Caddick who took job from Styles & Wood
11 hours ago

Green light for Birmingham’s tallest resi tower

Construction go-ahead for 51-storey skyscraper
10 hours ago

McLaren and Sisk hire regional directors from Kier

Andy Langley and Bruce Clarke take up key roles
11 hours ago

Oxford Science Park expansion approved

Major office and laboratory complex is set to be built in Oxford next autumn
10 hours ago

Giant property fund suspends dealing

Outflow of cash prompts move as investors flee sector
1 day ago

Mace takes jump factory system to next level

Contractor launches Mace Tech business to transform high rise flats building
1 day ago

Winvic to build £57m Cardiff PRS tower

Winner confirmed for build to rent scheme as Grainger agrees funding deal
1 day ago

Creagh Concrete targets £200m turnover

Expanding concrete specialist looks to grow workforce to 1,000
1 day ago

Council fined £1.4m after falling bollard injures girl

Court hears how failings at council's highways deprtment left a six-year old with brain injuries
1 day ago

Consultation opens on ring-fencing retentions in Scotland

Specialist contractors call for action to protect retention payments
1 day ago

Vital Energi lands £7m M&E package from Berkeley Homes

Latest win for specialist at Royal Arsenal Riverside development
1 day ago

Willmott Dixon wins £39m university refurb job

London South Bank University awards contract for new learning hub
1 day ago

Edinburgh private rental scheme approved

Moda Living gets all clear on 139-flat Springside scheme
1 day ago

Plan for £100m landmark Portsmouth University project

13-storey academic building will rise to
2 days ago

Go-ahead for £500m Thames riverside fire station scheme

Developer U+I to start construction on major mixed use site in 2021
2 days ago

Just days left for deal to keep Midlands hospital restart on track

Government red tape over funding improvement targets holds up deal
2 days ago

Amey utilities and waste business up for sale

For sale sign hoisted over loss-making divisions employing around 6,000 staff
2 days ago

Skanska chalks up £23m Bristol secondary school job

Contractor has strong track record of school projects in the city
2 days ago

Nod for 350 flats plan at old Leicester City ground

Mix of rental and for sale flats to be built at former Foxes homes
3 days ago

Buyers report construction still in “contraction hole”

Speed of decline falls in November but political uncertainty casts shadow over industry
3 days ago

Boost your online presence – join the Enquirer Directory

Site for suppliers and buyers showcases products, services and latest stories
2 years ago

Heavy rain hits another major civils job

Galliford Try's £120m Lincoln Eastern Bypass turns into a quagmire
3 days ago

Sky plans major film studio complex at Elstree

Legal & General will develop and part-finance the 32-acre site in Hertfordshire
3 days ago

Chancellor pledges review of freelance tax changes

Review of planned IR35 changes could spare construction widespread disruption
3 days ago

ISG on board for £89m Cardiff bus interchange

Mixed use scheme is contractor's biggest win of the year
3 days ago

Atkins online plea to SMEs to help fix potholes

Consultant aims to reach more small firms by bypassing traditional procurement route
3 days ago

Plan for new 8,000-seat Edinburgh indoor arena

Arena scheme to include conference, retail, leisure and hotels
3 days ago

Contractor services