CONSTRUCTION DISPUTES IN THE AMERICAS
CD: How would you characterise the current construction disputes landscape across the Americas? What defining trends have you observed impacting this space?
Walsh: Construction demand remains strong, however commodity price fluctuation, inflation, supply chain inconsistencies and skilled labour shortages continue to cause delay and cost disputes. On the contract negotiation side, we have seen a trend toward contractors and subcontractors refusing to honour bids for the same time periods owners once expected and relied upon. We have also seen a trend toward an increased volume of disputes with design professionals. We attribute some of these disputes to owners looking for additional sources to pay damages to overcome cost overruns, attributing some increased change order claims by subcontractors to insufficient design. However, design error claims also typically increase in a high demand and tight schedule market when time pressures stretch design teams thin, resulting in less than ideal oversight, work pushed down to more inexperienced designers and ultimately causing gaps, errors or failures in coordination.
CD: What particular types of construction disputes are typically being seen in the Americas? What factors are driving them?
Walsh: We are seeing extensive delay and cost overrun claims, many of which typically include lien-related disputes. We believe that funding pressure from equity investors and lenders is driving the schedule pressures between owners and contractors, with investors and lenders only agreeing to lend money or contribute capital when the owner agrees to deliver the asset in a shorter time period than previously required.
Jul-Sep 2025 issue
Norton Rose Fulbright US LLP