DEVELOPING STRATEGIES TO MITIGATE CONSTRUCTION DISPUTES
CD: Could you provide an overview of current dispute levels in the construction industry? What factors have been driving conflict in this sector?
Crossley: In addition to the usual conflict drivers in construction, such as arguments over quality, the amount of work completed and the timely delivery of projects, which lead to defects, extension of time and payment claims and disputes, local and global political and economic factors such as the Ukraine war, the long-term social and commercial effects of Brexit and coronavirus (COVID-19) measures, UK stock market turmoil following the short-lived mini budget and the associated inflation hikes, the scaling back or abandonment of infrastructure projects, and the rising cost of materials, energy and labour, are driving conflict at all stages – from project procurement and planning through to execution and completion. To tackle climate change, energy infrastructure requiring new technologies, which in some cases is replacing renewable installations from the early 2000s, is urgently needed. Conflict around such solar and wind projects could therefore soon generate disputes.
McWilliams: The current tempo is toward a slightly rising level of disputes. In many ways, this reflects a thawing of the pause that prevailed during the COVID-19 pandemic when, understandably, counterparties and issues were given the benefit of doubt. We are now seeing many examples where that was justified, albeit others where some adjustment to project parameters need to be formalised and residual claims resolved. Often that is being achieved, either before formal dispute processes become necessary, or in the earlier stages of these.
Jan-Mar 2023 issue
Accuracy
Hogan Lovells International LLP
Mayer Brown International LLP
Quinn Emanuel Urquhart & Sullivan UK LLP