Greater use of technology helped the average value of construction disputes in the UK fall by 47% last year.
According to the latest Arcadis Global Construction Disputes Report, the value of disputes in the UK averaged just $17.9m (£14.1m) in 2018 – well below the global average of $33m (£26m).In 2017, the average value of a dispute in the UK was $34m (£26.7m).
Gary Kitt, head of UK contract solutions at Arcadis, said: “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.”
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He said increased use of digital would help deal with difficulties before cost and time pressures escalate leading to legal rows.
The report said that with mega-projects continuing to expand around the globe, contracts, plans and the projects themselves will be more complex, and more parties will be involved in the construction process.
“With more project participants, it is essential for those involved to understand the contract, their role in the project, and how to work with the team,” it said.
The UK remained the jurisdiction with the shortest average length of time to solve a dispute – 12.8 months. But this is up on the previous year’s time of 10 months.
Globally, the most expensive and protracted construction disputes were in the Middle East, with the average dispute worth $56.7m (£44.5m) and taking 20 months to resolve.
The overall value of disputes globally decreased in 2018, which indicates the industry is beginning to understand the importance of addressing the human factors.
“However, it is noteworthy that the new leading cause of disputes is owner/contractor/subcontractor failing to understand and/or comply with its contractual obligations, which emphasises that there is still work to do.
“Our report reveals that owners and project participants who are engaging in formal, contract-mandated avoidance, mitigation, and resolution techniques are reaping success,” said Arcadis.
Methods now being used in several regions across the globe include:
- Risk Management
- Dispute Review Boards
- Mediation
“Overall, we found that globally the construction industry is in fact learning the value of engaging in proactive dispute avoidance, mitigation and resolution techniques.”
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