The Global Picture
The annual Arcadis Global Construction Disputes Report 2019: Laying the Foundation for Success reveals key themes and provides insights into the global construction disputes market.
It highlights that, while the overall volume of disputes remained consistent with last year’s results, the average value of these disputes has decreased by nearly 24% to US$ 33 million. However, the average time taken to resolve these disputes has risen slightly to 17 months. As the industry seeks to better understand and address the impact of human factors in disputes, the aspiration is that early dispute resolution techniques - such as dispute avoidance - will become increasingly common.
Construction disputes in the UK
The UK remains the jurisdiction with the shortest average length of time to solve a dispute – just 12.8 months. However, this is up approximately 28% on last year and consistent with the global trend, whereby disputes are taking longer on average to resolve.
Meanwhile, the average value of disputes in the UK has fallen 47% to US$ 17.9 million; well below the global average and a significant decrease on average values over the last six years.
In the UK, we continue to see that most disputes are resolved after they have crystallised, rather than parties seeking to avoid or mitigate potential dispute situations as they arise. While it is encouraging that negotiation remains the preferred method of resolution, our respondents determined that the number one factor which could have the biggest impact in avoiding disputes at all ‘is a willingness to compromise in the dispute’.
“In some cases, it could be argued construction contracts are simply too complex for administrators to understand, and better training for everyone involved would go some way towards avoiding disputes as they arise. However, our results show the UK to be a world leader in effective avoidance and mitigation strategies, and as we continue to transition towards greater use of digital technologies like BIM and 4-, 5- or 6D modelling, we are likely to see an improvement in risk allocation much earlier on in the process. This could help all parties to collaboratively resolve any difficulties before cost and time pressures start to escalate.”
Gary Kitt, Head of Contract Solutions, UK