Construction disputes are a frequent issue across the UK construction sector. Projects often involve multiple parties, tight deadlines and complex contractual arrangements, all of which can increase the risk of disagreement. When disputes arise, they can cause delays, increased costs and significant disruption to a project.
In this article, we explore the most common causes of construction disputes and the options available for resolving them. We also explain how to access a free 30 minute consultation with a solicitor if you need advice tailored to your construction or commercial situation.
Payment disputes
Payment disputes are one of the most common causes of construction conflict. These often arise where interim payments are delayed, withheld or disputed, or where there is disagreement over the final account.
Issues may involve retention sums, the validity of pay less notices or whether payment applications comply with the contract. The Housing Grants, Construction and Regeneration Act provides statutory payment protections, but misunderstandings or failures to follow the correct procedure can still lead to disputes.
Clear payment provisions and accurate record keeping are essential to reducing the risk of payment related disputes.
Scope of works and variations
Disputes frequently arise where the scope of works is unclear or changes during the project. Variations may be requested verbally, implemented urgently or poorly documented, leading to disagreement over whether additional work was authorised or how it should be valued.
Without clear instructions and written variation orders, contractors may struggle to recover additional costs, while employers may dispute liability for unexpected charges. These disputes often require careful examination of the contract terms and contemporaneous records.
Delays and extensions of time
Delays are another major source of construction disputes. Projects may be delayed due to late design information, changes in scope, shortages of labour or materials, or unforeseen site conditions.
Disputes often focus on who is responsible for the delay and whether the contractor is entitled to an extension of time or additional payment. Loss and expense claims can arise where delays increase costs.
Proper notice procedures and programme updates play a key role in protecting a party’s position in delay related disputes.
Defective or poor quality work
Allegations of defective workmanship are common, particularly towards the end of a project. Employers may claim that work doesn’t meet the required standard, while contractors may argue that issues arise from design problems or specification changes.
Determining liability often requires expert evidence and careful assessment of the contract, drawings and specifications. Distinguishing between genuine defects and fair wear or agreed changes is central to resolving these disputes.
Contract interpretation and professional issues
Construction disputes often arise from differing interpretations of contract terms. Standard form contracts such as JCT and NEC aim to provide clarity, but disputes can still occur where clauses are ambiguous or poorly drafted.
Professional negligence may also be an issue, particularly where architects, engineers or consultants are involved. Disputes may arise where design errors, inadequate advice or failure to meet professional standards lead to additional costs or delays.
Understanding contractual obligations and professional duties is key to resolving these issues effectively.
Dispute resolution options in construction
There are several methods available for resolving construction disputes and choosing the right one depends on the nature and urgency of the issue.
Negotiation is often the first step and can lead to a quick and cost effective resolution. Mediation is also widely used and involves an independent mediator helping the parties reach a settlement.
Adjudication plays a central role in construction disputes. It offers a fast track decision making process and is particularly suitable for payment disputes. Decisions are temporarily binding and enforceable, allowing cash flow to be maintained.
Arbitration and litigation may be appropriate for more complex or high value disputes. These routes are more formal and can be time consuming and costly, but they provide final and binding outcomes.
Managing and preventing construction disputes
Many construction disputes can be prevented through careful planning and communication. Clear contracts, well defined scopes of work and proper record keeping can reduce the risk of disagreement.
Prompt action when issues arise can also help prevent disputes from escalating. Early legal advice can assist in protecting rights and identifying the most effective resolution strategy.
Resolving construction disputes effectively
Construction disputes can be disruptive, but they don’t have to derail a project. With the right approach and an understanding of the available remedies, disputes can often be resolved efficiently and commercially.
Please note that this article is for informational purposes only and isn’t a substitute for legal advice. We encourage readers to contact Osbourne Pinner’s commercial property solicitors for case specific guidance.
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