September 25, 2018

Report suggests construction industry is failing to learn from its mistakes

News Article

A new report, which reveals that the value of construction disputes in the UK has remained largely unchanged, has raised questions about the sector’s willingness to learn from its mistakes.

The report, entitled ‘Does the construction industry learn from its mistakes?’ which has been produced by design and consultancy firm Arcadis, found that in 2017 the average amount being fought over in UK construction disputes was £26 million.

The figure remains unchanged compared with the previous year, although there is some good news as the research has found that the time take to resolve disputes fell by around eight weeks, to ten months in 2017.

The three most common cause of disputes were found to be a failure to properly administer the contract, a failure between parties to understand or comply with their contractual obligations and a failure to serve the appropriate amount of notice under the contract.

The report’s authors also warned that the likelihood of construction disputes rising in 2018 was “highly likely” as contractors sought to recover their losses following the Carillion collapse.

They claim that “the primary causes of disputes are all matters that could be avoided by a more integrated and collaborative approach to project procurement.

They also suggest that “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.”

Adam Davis, a Partner with Palmers who specialises in construction disputes, said: “The advice for any party who wished to avoid protracted and costly litigation, is to consider using adjudication.

“It is fundamental, at the outset, for a party to have in place a dispute strategy and also ensure that its resources are properly channelled to obtain a quick resolution.

“This includes the selection of experienced representatives and experts for the adjudication, who will be responsive and keen for matters to be resolved proactively, as quickly as possible and with an agile and commercial approach.”

For advice on all aspects of construction contracts including disputes and the adjudication process, please contact us.