CD: How would you describe the extent of disputes currently arising in the construction sector? Have you observed any significant global and regional trends in this space?
Farmer: The construction sector is vast, in that it covers many sub-sectors such as real estate, infrastructure, transport projects, energy & utilities and oil & gas. As a result, it is difficult to fully and accurately describe the extent of the disputes in the construction sector in a single article. That said, certain trends can be identified. The industry continues to report that disputes are increasing in average value and taking longer to resolve. These same industry reports identify that the biggest single cause of construction disputes continues to be a failure to properly administer the contract and I would not disagree with this conclusion. In addition, since the fall in oil prices, we have seen a significant increase in disputes in markets which are underpinned by oil revenues and we anticipate that this trend will continue for the foreseeable future.
Corbett: There has certainly been an increase in the use of adjudication across the construction sector. This, in turn, has meant a decline in the use of high court litigation because adjudication seems to be popular and is seen to be effective in helping parties to achieve a resolution to a dispute early on. I’m not saying adjudication itself has achieved the resolution, but it probably sets you on the right path and parties then end up resolving matters themselves. Trend-wise, I certainly would say there has been a decrease in high end, high court litigation, and probably to certain extent arbitration as well, but through an increase in the use of adjudications.
Apr-Jun 2016 issue
Addleshaw Goddard LLP
BAM Nuttall Limited
Galliford Try plc
Von Wobeser y Sierra SC