The average value and length of disputes in the UK remains significantly lower than the global average, with resolution time down 23% on the year prior, according to Arcadis‘ ‘Global Construction Disputes Report 2020′
Consistent with previous years, not complying with contractual obligations, on the part of both those administering and undertaking the works, continues to be a primary cause of construction disputes.
A ‘lack of understanding of procedural aspects of the contract’ was one of the most commonly cited reasons for problems emerging, with over 60% of respondents stating that proper contract administration would have the single largest impact in avoiding construction disputes.
Major stakeholders, including contractors, have indicated a desire to work together through signing up to the industry Conflict Avoidance Pledge (CAP), which is encouraging all organisations to consider their working practices and the way they deal with disputes.
Gary Kitt, head of UK Contract Solutions at Arcadis, said: “The construction industry has been grappling for decades with solutions to its adversarial nature and inherently risk-averse attitude.
“Yet now more than ever the entire supply chain – from employers right through to sub-contractors and suppliers – needs to work together to keep projects moving and prevent disputes from arising.
“The downward trend in terms of both value and length of disputes has been encouraging, but the more important concern is how we maintain this in a post-pandemic environment. One solution would be to make the administration of contracts easier for everyone involved.
“This calls for industry-wide collaboration not only in terms of who is represented on drafting bodies to make sure that everyone on the project understands the consequences of their actions but also by using more collaborative forms of contract that will help to inspire longer-term confidence in delivery.”
Read the full report here.