Published earlier this year, the RIBA’s Construction Contracts and Law Report 2022 contains a snapshot of the challenges within the construction industry.
As the industry emerges from a post-Brexit and post-COVID world, the report outlines where we are now, including an analysis of an industry-wide survey, which covered legal issues and disputes and dispute resolution.
The survey, completed by over 950 respondents, asked them to look back over the past year and give their views on key legal difficulties within construction.
What kinds of legal issues and disputes are people facing?
Whilst construction contracts are put in place to mitigate legal issues arising during a project, they do not stop these issues altogether.
The most challenging issues revealed by the report were:
– Contract administration
– Insurance/liability for risks
– Dispute resolution
It wouldn’t surprise those who work in the construction industry that the findings of the report highlight that disputes are more likely to occur during construction, which accounted for 63 per cent, rather than after practical completion which stood at 37 per cent.
The report also uncovered that 60 per cent of disruptions to construction projects were caused by employer variations, more than double that caused by contractor variations (29 per cent).
In the main list of issues that people experienced in the last year, it’s not surprising that the most common were:
- Extensions of time (50 per cent)
- Defects (41 per cent)
- Loss and expenses (31 per cent)
- Final account variations (30 per cent)
The findings of the report only strengthen the argument for adjudication, this is illustrated by the fact that it is the most common avoidance procedure included in most parties’ contracts (50 per cent).
This was followed by negotiation at the board level (34 per cent), arbitration (30 per cent), mediation (27 per cent), and negotiation at the site level (25 per cent).
In the vast majority of cases, adjudication also allowed work to continue on-site. In fact, 73 per cent of respondents said that was their experience of a dispute, showing that adjudication is delivering what it promises.
There are common themes running through the report, which only highlight the need for the correct advice and guidance when faced with construction disputes.
Are you facing difficulties with a construction contract? Contact us today for advice.