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Sat July 11 2020

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Construction disputes are getting resolved more quickly

4 Jun The time taken to resolve construction disputes in the UK has fallen to an average of just 9.8 months in the last year, according to the latest Arcadis report.

This is the fastest resolution time of all regions surveyed, and down 23% on the average 12.8 months in 2018.

The average value of UK disputes has remained constant and, at just US$17.8m in 2019, is still significantly below the global average of US$30.7m.

The findings are in the latest Arcadis report, Global Construction Disputes Report 2020: Collaborating to achieve project excellence.

According to the report, the majority of disputes across all sectors are caused by those administering contracts, with a ‘lack of understanding of procedural aspects of the contract’ one of the most commonly cited reasons for problems emerging. More than 60% of respondents stated that proper contract administration would have the single largest impact in avoiding disputes.

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When it comes to resolving disputes, adjudication has replaced party-to-party negotiation  as the most common resolution method. However, it seems that most effort is now being spent in mitigating disputes, rather than focusing on the resolution stage which dominated the year prior. Efforts spent in avoidance rank even lower in third place, with 58% of respondents reporting that settlement after a dispute had crystallised was the most common form of resolution.

However, there are signs that things are changing, Arcadis says, with major stakeholders, including contractors, indicating 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.”

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