BWL Legal discuss trends associated with Construction Disputes
Earlier this month, RIBA published its Construction Contracts and Law Report 2022.
As well as covering other areas of law, the report detailed that over a quarter of respondents (27%) were involved in a construction dispute over the past 12 months. This may seem like a significant proportion but according to RIBA, this figure has reduced from 44% in 2015. Whether this reflects an ongoing trend or if this is part of a reduction in construction activity arising from COVID is debatable. However, construction disputes are on the rise, with 48% of respondents reporting that they felt the number of disputes had increased due to the following:
Disputes are used as a mechanism to preserve margins;
- Late payments;
- The inappropriate transfer of risk;
- Adversarial approaches to a project.
These attitudes are compounded by the financial impact of COVID, the effects of Brexit, and ongoing issues such as labour shortages and inflation. As a result, for most in the industry, the involvement in a construction dispute if often a question of when rather than if.
RIBA acknowledges that the most common method to resolve disputes is adjudication, which is good reason.
Adjudication is quick. Disputes are decided promptly, usually within 28 days. Decisions, which are binding on the parties, are capable of being enforced in the courts if necessary, and the speed of the process is designed to facilitate cash flow. Adjudication provides a “quick and dirty” resolution to disputes, allowing construction projects to progress with limited disruption.
Respondents to the RIBA report also noted that negotiation at board level was used in 34% of disputes, negotiation at site level 25%, and that mediation was used in 27% of disputes. This is a good reminder that – more often than not – maintaining dialogue is often the best way to resolve matters.
At BWL, we can assist you with any construction dispute or adjudication. Our team includes expert solicitors, adjudicators, and mediators who can guide you on the best approach to bringing your matter to a swift and cost-effective solution. To speak with one of our construction solicitors, please get in touch.