Construction disputes get longer and costlier

Legal disputes in Britain’s construction industry are now taking over a year to be resolved, according to study from consultant EC Harris.

Construction disputes get longer and costlier

EC Harris found that UK construction disputes took, on average, 12.9 months to be settled in 2012 compared to 8.7 months in 2011, an increase of 33%.

It also found that joint ventures are particularly susceptible to legal disputes.

The report – Global Construction Disputes: A Longer Resolution – is EC Harris’s third annual study into the duration, value, common causes and resolutions of construction disputes across the globe during 2012.

Dispute values in the UK rose from £6.6m in 2011 to £17.7m in 2012.  Despite this increase, the UK is still below the global average which stands at £20.4m.  The Middle East continued to experience the highest value disputes at £41.8m, whilst disputes in the US had the lowest value at £5.8m.

Gary Kitt, head of contract solutions at EC Harris, said: “Construction projects are increasing in complexity, so when a dispute materialises its duration is not necessarily linked to its value, and so complex disputes can take equally as long to unravel which is resulting in many disputes spanning a year or more.  Another reason for the slowdown in the UK is the Technology & Construction court’s ruling that encourages the use of the pre-action protocol.  This added step has tended to delay resolution of some major disputes.”

One of the highest profile disputes in the UK last year involved the construction of the Shard in London.  The dispute between steelwork companies Cleveland Bridge UK and Severfield-Rowen Structures first came to light in early 2010, but was only resolved in January 2013 following a lengthy dispute that ended up in the High Court.   Cleveland Bridge was ultimately ordered to pay o £824,478 in damages to Severfield-Rowen for delays and defects which were estimated to cause a delay of 42 days on the Shard’s construction.

This article was taken from The Construction Index website and can be read in full by clicking the following link.