CONSTRUCTION DISPUTES – SELECTION PHASE
Lowe: How would you describe the level of construction disputes over the last 12-18 months or so? What overriding trends are defining this space?
Hanson: We are seeing a steady level of disputes, showing no signs of slowing down in the short term. Disputes are active across a variety of sectors, notably airports. One theme that is common to nearly all the disputes we are seeing is the transactional and adversarial nature of the contracts and the disproportionate risk allocation within them. It is less common to see disputes on projects that are set up and delivered collaboratively. A trend we are beginning to see is an increase in the number of parties seeking advice, and making an investment, at the beginning of projects. The acknowledgement that projects are often inadequately planned before being tendered is focusing efforts on mitigating the risk of disputes further down the line.
Lachheb: From our perspective, we have seen a constant level of dispute-related enquiries over the last 12-18 months. We can reasonably infer that the number of disputes in construction projects is not declining. The dynamics of this space varies from one region to another. In Europe and Africa, for example, the level of investment in the infrastructure sector is projected to grow significantly. Given the strong correlation between these two areas, we should observe a rise in the number of disputes over the coming years. We should also see an increased use of better contracting mechanisms to resolve disputes, such as dispute adjudication and review boards.
Jan-Mar 2019 issue
BAM Nuttall Limited
Walker Morris LLP