The value of UK construction disputes fell by 12{0a6a65c996ed4169444354e707b897cdb00dbefc1d0429e8febb9bf11027ba53} in 2015 according to Arcadis’ Global Construction Disputes Report 2016.  The findings indicate a greater willingness to mediate before the onset of formal proceedings says the report.  The UK is also the fastest place to resolve a dispute in the world, although the length of time increased slightly, to nearly 11 months over the year.

Tellingly, amongst the top five causes of disputes in 2015 were:

  1. Failure to properly administer the contract
  2. Incomplete design information or employer requirements (for Design and Build)
  3. Employer, contractor or subcontractor failing to understand and/ or comply with its contractual obligations

Pressure by the UK courts to reduce the cost of litigation following the Jackson reforms, combined with the commercial pressure on construction executives to reduce the cost of disputes, has led to an increase in negotiated settlements, says the report.

The most popular methods of dispute resolution were: party to party negotiation, adjudication and mediation.  Arcadis’ head of UK contract solutions, Gary Kitt expects the focus on mediation to be a trend that continues to gain traction in future. “Effective dispute avoidance mechanisms need to be actively deployed as early as possible within a project, and involve the right expertise and support at the right time,” he said.

“The fall in disputes and speed of resolution is good news for the UK construction industry and its insurers,” said James Burgoyne, Director – Claims & Technical, Brunel Professional Risks.  “But there are still problem areas to address.  Contract failings in particular are still causing problems.  It is important that all parties to a construction contract manage their risk by putting effective procedures in place to avoid disputes.”

Articles about the Global Construction Disputes Report have been published by Construction News and Builder and Engineer.  Arcadis has published the full global report and press release on its website