Arcadis Global Construction Disputes Report shows 117% increase in value of disputes

The Global Construction Disputes Report makes some interesting reading for lawyers and construction professionals alike. The Report notes particular impacts on the industry through Covid-19 with 75% of UK respondents recording an impact from the pandemic and force majeure events becoming one of the top 3 causes of disputes globally. 

What is also particularly interesting is the number one cause of disputes - a failure by a party to understand or comply with its contractual obligations. Whilst in a nutshell this appears to cover all disputes, a breach of contract (whether it be defective work or a failure to provide extensions of time for example) is in some way a failure to comply with contractual obligations, however, more fundamental is that part of this number one cause is a failure to understand contractual obligations.

Many times I hear at the outset of a new dispute that there is no contract or they cannot locate a copy of the contract. Firstly, there is more often than not always a contract, whether it be verbal, documented in correspondence or a full written document. How the relationship began is key to understanding what obligations apply. Whatever the basis of the contract for any given project, the terms should always be immediately to hand and obligations, timeframes and notice requirements checked carefully and monitored accordingly. Whilst some standard form or bespoke contracts can be very dense to read and understand, it is important that the individuals running a project are aware and understand these terms to ensure the best protection in the event a dispute arises, and better yet, to avoid a dispute occurring. Where similar terms are used on all projects, consider in-house training for staff to understand the key obligations and learn from errors in the past. Finally, if in doubt, seek advice. Prevention is better than cure.