Costly construction disputes rack up £26m

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construction disputes

Cost consultants Arcadis have revealed that in 2017, disputes between the construction and engineering sectors in the UK cost around £26 million

The research by Arcadis suggests that UK construction disputes cost more than in Europe and North America.

On average, construction disputes used to be the lowest globally compared to other sectors and countries. However, in 2016/2017 construction disputes in the UK soared up to £26 million compared to $19 million in the US and £22 million across the rest of Europe.

The net global figure for construction disputes currently stands at £32.8 million, an increase of £400,000 since 2016.

The Arcadis’ report, titled “Does the construction industry learn from its mistakes?”, lists the causes, duration and value of construction disputes and suggests the best ways to avoid, handle and resolve them.

Gary Kitt, head of UK contract solutions at Arcadis, said: “The primary causes of disputes are all matters that could be avoided by a more integrated and collaborative approach to project procurement.

“The fact that many of the leading causes of disputes remain the same as in previous years begs the question of whether construction professionals are learning from their mistakes when it comes to disputes.

“However, investment in technology represents an enormous opportunity to help the industry.

“If companies can thoroughly understand the root challenges of their disputes, technology can help them overcome the status-quo by co-creating the solutions and strategies to tackle elusive and recurrent problems.”

The 2018 report looks into human behaviours and discusses the importance of finding new methods to tackle disputes from the initial disagreement.

Although the market is known for its costly nature, the time taken to resolve the disputes has dramatically decreased to an average of 10 months. This is a significant improvement compared to proceedings within the last couple of years, where disputes took much longer to solve and rectify.

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