Global Construction Disputes: Don't get left behind

According to the latest Global Construction Disputes Report, the average dispute handled by Arcadis lasted 15.5 months.

A city at night

"There is a real opportunity for Construction firms to employ effective dispute avoidance mechanisms and deploy them as early as possible within a project."

Arcadis has just released the Global Construction Disputes Report 2016. The report found that the average dispute, handled by Arcadis, lasted 15.5 months. In the full report you will see an in-depth, data-driven review of our Arcadis projects and disputes globally in 2015 and focused on five key areas: the length of disputes, average value, common causes, most popular methods and region-specific nuances.

The report highlights the challenges facing the Australian construction sector, where we’ve already seen increased challenges with commodity and currency volatility, and suffering due to mining sector declines. The uplift we did see in oil and gas looks to be nearing completion of its capital expenditure stage, so within that background and context, construction disputes represents another cost and another risk associated with these major projects.

Arcadis found the top five causes of Construction Disputes globally in 2015 were:

  • Failure to properly administer the contract
  • Poorly drafted or incomplete and unsubstantiated claims
  • Errors and/or omissions in the contract document
  • Incomplete design information or employer requirements (for D&B/D&C)
  • Employer/contractor/subcontractor failing to understand and/or comply with its contractual obligations

Don’t get left behind

A continuing trend over the last six years is that globally on average disputes have increased in value and duration, with the notable increase this year in the length of time taken to resolve disputes. The theme of the report, “Don’t get left behind”, is focused around making sure that in recognizing what causes disputes, avoidance mechanisms can be actively deployed to resolve issues as they materialize.  Furthermore, if then a claim does progress into a formalized dispute, actively deploying key support and expertise, effective strategies and the active use of Alternative Dispute Resolution (ADR) will assist in reducing the time it takes to resolve the dispute.

Failure to properly administer the contract holds on to its top position globally from last year as the main cause of construction disputes. To address this, party to party negotiation is also remaining as the most popular method of alternative dispute resolution.

In Australia, there is a real opportunity for Construction firms to employ effective dispute avoidance mechanisms and deploy them as early as possible within a project. By finding the right expertise and support at the right time some of these disputes can be reduced in length, or better still be avoided altogether.

Arcadis has over 100 Construction Disputes professionals globally, including myself, if we can help please get in touch. 

Download your copy of the Global Construction Disputes Report 2016 here.

Gareth Robbins

Sector Managing Director - Property, Energy and Resources Ask me a question