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Global Construction Disputes Report 2016: Don’t Get Left Behind

Arcadis Global Report shows construction disputes hit record length of over 15 months. The numbers for the U.S. Construction Industry tell a different story.

Roy Cooper

Regional Leader - Vice President, Head of Contract Solutions - North America +1 860 503 1465 Ask me a question

The U.S. was the only global region to experience a reduction in both dispute value and resolution time

With uncertainty reigning in markets around the world and construction projects more complicated than ever before, construction disputes are a major risk and can have far reaching consequences.

The Arcadis report highlights that for the third consecutive year the U.S. construction dispute costs have decreased in value – making the U.S. the only global region to achieve both a decrease in construction dispute values and the length of time to resolve disputes.  It appears the U.S. construction industry has become more sophisticated in their approach to managing risk and early intervention as an effective means to address their overall risk.  

Roy Cooper, vice president, Arcadis North America, notes “This trend is good news for the U.S. and Canada, but there is one downside. Even though more disputes are being settled early, the ones that remain grow into complicated, emotional affairs, with large damages at stake. These also take longer to resolve, since U.S. courts hate to try construction cases due to their large volumes of documents and greater complexity.”

“There is clearly a lot of social and public need for new infrastructure across the world… There has to be a way of bridging the gap and finding solutions to improve investment readiness.”

“The highest dispute handled by Arcadis in 2015 was worth $2.5 billion.”

 

The Global Construction Disputes Report 2016 findings include: The property/real estate sector was found to have the most disputes, closely followed by the social infrastructure and the public sector. Mirroring last year’s  report, the most common cause of dispute was failure to properly administer the contract. Additionally, Joint Ventures (JVs) were found, once again, to be at particular risk, with 25.5% of JVs ending in dispute. Meanwhile, when it came to resolving disputes, party to party negotiation remained the most popular method of alternative dispute resolution, while mediation and arbitration ranked 2nd and 3rd respectively.


 

 This year’s report is Arcadis’ sixth annual study into the duration, value, common causes, and methods of resolution of construction disputes across the globe. The research was conducted by the Arcadis Contract Solutions experts and is based on construction disputes handled by the teams during 2015.

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Roy Cooper

Regional Leader - Vice President, Head of Contract Solutions - North America +1 860 503 1465 Ask me a question

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