{"id":158703,"date":"2026-03-25T07:45:29","date_gmt":"2026-03-25T07:45:29","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=158703"},"modified":"2026-03-25T10:22:37","modified_gmt":"2026-03-25T10:22:37","slug":"from-gridlock-to-green-light-tackling-rising-adjudications-and-conflict-in-construction","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/digital-construction-news\/construction-technology-news\/from-gridlock-to-green-light-tackling-rising-adjudications-and-conflict-in-construction\/158703\/","title":{"rendered":"From gridlock to green light: Tackling rising adjudications and conflict in construction"},"content":{"rendered":"<h2>From escalating adjudications to strained relationships, this article examines how construction can reduce disputes and create a clearer path to progress<\/h2>\n<p>The construction industry is operating under intense pressure. The cost-of-living crisis, rising material prices and ongoing skills shortages are placing unprecedented strain on contractors and subcontractors to deliver projects on time and within budget.<\/p>\n<p>As financial pressure builds, payment disputes and adjudications are increasing sharply \u2013 raising serious concerns about cashflow, trust and long-term industry sustainability.<\/p>\n<p>Against this backdrop, Payapps, an Autodesk company, brought together industry leaders at the F1 Arcade in London to discuss conflict avoidance and the critical issue of <a href=\"https:\/\/www.pbctoday.co.uk\/news\/digital-construction-news\/construction-technology-news\/shifting-from-spreadsheet-stress-grove-mechanical-services-embraces-technology-to-streamline-supply-chain-payments\/156631\/\" target=\"_blank\" rel=\"noopener\">fair and prompt payment<\/a>.<\/p>\n<p>The panel featured:<\/p>\n<ul>\n<li>Ian McIlwee, CEO of the Finishes and Interiors Sector (FIS)<\/li>\n<li>Reiss Duthie, commercial director at Mitie and UK adjudicator<\/li>\n<li>Rob Driscoll, director of legal and business at the Electrical Contractors\u2019 Association (ECA) and former adviser to the Cabinet Office and Construction Leadership Council.<\/li>\n<\/ul>\n<h3>Adjudications reach record levels<\/h3>\n<p>The session began by highlighting the growing concern around dispute volumes. Referencing research from King\u2019s College London, it was noted that between May 2023 and April 2024, construction adjudications reached an all-time high of 2,264 cases, a 9% increase on the previous year.<\/p>\n<p>The data reveals a troubling trend. Half of the respondents cited inadequate contract administration as the leading cause of payment disputes, while 42% pointed to a lack of competence. Most strikingly, \u2018smash and grab\u2019 adjudications &#8211; focused on failures to issue valid payment or pay-less notices rather than the value of work per se &#8211; accounted for 63% of all cases.<\/p>\n<h3>Smash and grab as a last resort<\/h3>\n<p>Ian McIlwee described smash and grab adjudications as a symptom of deeper financial stress across the industry. \u201cIt\u2019s a bit of a scorched earth policy to get some money back,\u201d he said. \u201cYou\u2019re only going to do it as a last resort, because you\u2019ve run out of patience or you\u2019ve run out of cash.\u201d<\/p>\n<p>Ian warned that construction faces two critical shortages: people and cash. Rising costs are creating layers of credit across the supply chain, with many specialist contractors relying on charge cards to cover merchant bills while waiting for payment. He stated, \u201cCash is not flowing through the supply chain effectively, and people are waiting too long to get paid.\u201d He went on to comment that despite payment league tables and reform initiatives, we\u2019re not really seeing an improvement in payment practices.\u201d<\/p>\n<h3>A fragile and fragmented supply chain<\/h3>\n<p>Rob Driscoll agreed that the rise in adjudications reflects wider structural fragility. He revealed that insolvencies remain around 20% higher than pre-pandemic levels, despite stabilising in recent years. \u201cIn many ways, the chain is more fragmented and more disaggregated than any other industry.\u201d This makes payment even more fragile and volatile, but also makes project delivery more precarious.\u201d<\/p>\n<p>Rob also highlighted the rising cost of adjudication itself. \u201cWith the cost of adjudication rising rapidly, you need lawyers, especially where you\u2019ve got to have a commercial dialogue,\u201d he commented, before adding a key reminder, \u201cYou don\u2019t want to go to adjudication.\u201d<\/p>\n<h3>Payment reform under scrutiny<\/h3>\n<p>In December 2024, the Fair Payment Code (FPC) was introduced to improve transparency and payment performance across the construction sector. Replacing the Prompt Payment Code, it allows businesses to apply for Gold, Silver or Bronze status, recognising different levels of payment practice.<\/p>\n<p>While supportive of the intent, Rob questioned whether the new structure would deliver meaningful change. \u201cThe beauty of the old code was that you either passed or failed,\u201d he said. \u201cIf you passed, it was the gateway to win more government work.\u201d<\/p>\n<p>By contrast, the tiered approach risks confusion. \u201cWhat exactly the Gold, Silver and Bronze tiers of the FPC actually mean is unclear and going to lead to some market confusion,\u201d he argued, noting that Bronze status requires only basic legal compliance and no longer unlocks public sector work.<\/p>\n<p>That said, Rob acknowledged the Code\u2019s value in setting expectations: \u201cIt does at least create a watermark for acceptable payment behaviour in a positive way.\u201d<\/p>\n<h3>Why disputes keep increasing<\/h3>\n<p>Ian pointed to a combination of regulatory change, contractual complexity and risk transfer as key drivers behind rising disputes. Construction firms are now spending around 1.6% of turnover on legal fees \u2013 double the industry norm.<\/p>\n<p>\u201cThere is a lot of change happening at the moment. There is an increased cost of compliance and added levels of uncertainty, which makes estimating tougher.\u201d<\/p>\n<p>He highlighted the impact of Part Two of the Building Regulations, which places greater emphasis on competence, accountability and responsibility. At the same time, heavily amended contracts continue to shift risk down the supply chain. \u201cAs more design risk is being forced into the supply chain, we\u2019re seeing the quality of technical design being novated,\u201d he said. \u201cThe confusion is adding to the level of disputes.\u201d<\/p>\n<p>Ian stressed that risk transfer alone is not a sustainable solution: \u201cWe need to find better ways to manage that\u2026 that aren\u2019t just taking all the risk and sending it down the supply chain.\u201d<\/p>\n<h3>The case for conflict avoidance<\/h3>\n<p>As Treasurer of the Conflict Avoidance Coalition, Ian argued that early engagement is critical. \u201cWe all need to step up and recognise that there is a better way,\u201d he said. \u201cWe have to start building relationships that are not driven to conflict, but driven to avoid it.\u201d<\/p>\n<p>Reiss Duthie echoed this view from the perspective of an adjudicator. He described how disputes can escalate rapidly, citing a smash and grab case where parties could not even agree on the contract. \u201cThat turned into a complex, lengthy, and costly adjudication,\u201d he said. \u201cAdjudication can erode trust.\u201d<\/p>\n<h3>Getting the basics right<\/h3>\n<p>For Ian, conflict avoidance starts with clarity. \u201cIt starts with the way that we contract \u2013 often people don\u2019t understand what they\u2019re responsible for.\u201d Clear responsibilities, transparent valuations, and well-defined application and payment dates are essential.<\/p>\n<p>He emphasised that many disputes stem from simple procedural failures: \u201cHalf of the disputes we\u2019re seeing are due to procedural error thanks to someone being off sick or on leave&#8230; nobody knows what\u2019s happening to that piece of paper.\u201d<\/p>\n<h3>Technology as a practical solution<\/h3>\n<p>Reiss explained how technology is helping address these challenges at Mitie. As a FTSE-listed company, compliance with the Construction Act and strong governance are essential. \u201cUsing Payapps brings standardisation to our procedures,\u201d he commented, allowing workflows to be audited and payment notices to be properly authorised.<\/p>\n<p>Automation also frees up valuable resources. Reiss said, \u201cBy automating repetitive tasks \u2013 like moving data between spreadsheets &#8211; we\u2019re freeing up our teams to concentrate on more impactful activities.\u201d For senior leaders, increased visibility over applications and payments delivers \u201creal gains in clarity\u201d and supports more collaborative discussions.<\/p>\n<p>Reiss concluded on an optimistic note: \u201cDigital transformation is unlocking new opportunities for our industry\u2026 embracing new technologies that will shape a more efficient, collaborative, and future-ready industry.\u201d<\/p>\n<h3>A clearer path forward<\/h3>\n<p>The panel discussion highlighted both the severity of current challenges and the tangible steps available to address them. Payapps, for example, helps contractors manage applications for payment more accurately and with improved visibility, reducing missed notices and disputes.<\/p>\n<p>While pressures on construction remain intense, the discussion offered a clear message: through early engagement, better contract administration and smart use of technology, the industry can move from gridlock to green light &#8211; creating a fairer, more resilient future for all.<\/p>\n<p><strong>Visit <a href=\"https:\/\/hubs.ly\/Q03_72HL0\" target=\"_blank\" rel=\"noopener\">payapps.com<\/a> for more information.<\/strong><\/p>\n<p><em>*Please note that this is a commercial profile.\u00a0<\/em><\/p>\n<div class=\"mk-custom-module-container\">\n<\/div>","protected":false},"excerpt":{"rendered":"<p>From escalating adjudications to strained relationships, this article examines how construction can reduce disputes and create a clearer path to progress. 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