Construction disputes on the rise post-pandemic

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Construction & Infrastructure Article

26 January, 2022

As more and more disputes arise it is important to consider alternatives to the traditional method of dispute resolution, not only for economical reasons but also for quicker swifter solutions which in some instances are far beyond the scope of what the Court may be able to order.

Why are we facing more disputes?

With the demand for contractors and projects to be completed at an all-time high partially due to Covid and partially due to an influx in both commercial and residential projects some form of dispute would seem to be inevitable.

Given the nature of construction projects, it is not uncommon for them to go over budget and with recent price increases across all sectors, this has been unavoidable.

Whilst the construction industry has been impacted as almost all projects have suffered delays and disruption and often with the absence of force majeure clauses which have led to disputes over budgets and timelines.

Whilst it is important to document what your intentions or expectations are far before the offset it is sometimes unavoidable, and you may end up in difficult situations through no fault of your own.

Innovation in disputes

A large number of disputes are now arising from the post-pandemic supply chain disruption which neither party seems to feel is as a result of its conduct or could have been predicted.

When disputes do arise settling the dispute at an early stage is always beneficial for all involved, mediation can be an extremely helpful tool to allow parties to reach a solution that may not be simple or straightforward.

This is down to a number of reasons beyond any parties control such as an increase in shipping prices, an increase in energy prices and also a shortage of skilled workers.

Whilst mediation is not the only form of alternative dispute resolution other methods such as adjudication, arbitration and inevitably court proceedings can all achieve a result for all parties, and each have their strengths and weaknesses and each matter should be considered at its own merits and facts.

JCT contracts generally have a right to adjudication which is binding unless the dispute is resolved in arbitration or litigation.

The adjudicator may be named within the contract, or the nominating body identified in the contract for the ease of all parties.

Should either party refuse to comply with the adjudication decision the other may seek to enforce it through the courts.

Another common type of contract used within the construction sector are NEC contracts. Any dispute that arises under an NEC contract must be referred to adjudication first which is helpful and can potentially reduce the costs and waiting time for all involved.

How to manage the project

To address or defend any claims it is important to ensure a clear and record is kept throughout the project and beyond, whilst this may not be necessary if the project is smooth, it is important to ensure that you do follow this principle as inevitably issues tend to arise when least expected and if you can document the position clearly it will assist you in the long run.

3 top tips

  • Document all parts of the process as this makes it clear for all parties and can be relied upon should an issue arise.
  • Communication is key- if you do not express the problems, you are facing the other party may not be aware of them however it is crucial what you say and how it is said.
  • Try to instruct Solicitors as early as possible if there are issues on the horizon this does not always mean formal correspondence will be shared but it is important to understand your position as early as possible.

For more information contact Sheroze Nadeem in our Construction & Infrastructure department via email or phone on 01772 220163. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Construction & Infrastructure department here

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