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How to handle construction disputes19 Nov 2014

Construction disputes are never an enjoyable experience and often they can be protracted situations, resulting in stress and financial cost. There are a number of ways to try and ensure that a construction dispute is solved promptly and with the minimum of disruption to your business.

In this post we will look at what to consider and actions that you can take to reduce the prolonging of a construction dispute, or even avoid them altogether.

Disputes in the construction industry can range from small issues with small costs involved, to full-blown disputes that can cost thousands of pounds to manage. Other disputes can centre on the time it has taken for a project to be completed. This second kind of dispute can be quite commonplace, especially if contract information has not been firmly defined before work starts and there are delays in receiving information.

So what are the first steps?

Recognise the problem or issue

This may sound very straight forward, but for many, disputes can start from a small inaccuracy or interpretation that has developed into delays and extra costs to the project.  Being pro-active and recognising a problem early can avoid a disputes altogether, indeed setting up early warning procedures can be advantageous.

Furthermore, if the dispute is relatively minor, arrange for a formal meeting with the other party and have an open discussion about how the problem can be resolved. If this isn’t viable or the dispute is more complex a more structured Negotiation meeting could be arranged and facilitated by an independent third party. It is also important to minute the meetings in order to clearly identify what the issues are and to record the positions of each party.

Ensure you have contractual entitlement

You may require expert advice here, but one of the first things to do is rather than point blame, check the contract you signed. Unfortunately for some, contracts amended to favour one party can mean  disputing an issue can be totally in one parties favour or the other. If you don’t have any contractual entitlement recovery of damages can be extremely difficult.

Ask a professional

If there is a dispute, get advice early so that you know your position; the longer the problem remains, the more costly it could become. Of course we’d like you to ask us! But whoever you ask, make sure you do so when the matter arises and also ensure that whoever you get advice from has the appropriate expertise in these matters. We offer a free consultation so it doesn’t even cost you anything.

What you will need to do

If you decide that you need to take action, you will need to gather all the factual evidence you have. The importance of demonstrating the facts cannot be underestimated. Hopefully you have the relevant documents – contracts, letters emails, photographs, progress reports, daily record sheets and so on. It’s important you keep records as this may be used in evidence to support your claim.

Decide the dispute resolution route

Along with your advisor, you will need to select the right course of action; although Adjudication is mandatory there are other methods of Alternative Dispute Resolution (ADR) such as Mediation Conciliation or Arbitration, You will need professional advice, as each method has different procedures and the time and costs incurred. Your advisor will be able to tell you which are the most appropriate methods for your dispute and how to mitigate costs of proceedings.

Litigation

In the event the dispute cannot be settled by the methods set out above, or it is a contractual requirement, the next step is litigation. Most parties will want to avoid this due to the signification time and cost involved but also the public nature of going to court. When in court, all documents and matters are open to the court, which may result in some embarrassment or more disclosure than a party may wish to entertain. Both parties will be able to make their case in detail to the court and the court will make the final decision.

Time and money can be saved if a party chooses to seek the services of a specialist consultant when a dispute arises. Often, good and sound advice from a consultant can mean the difference between facing dispute resolution that can be costly, and settling the matter quickly with a sensible and amicable resolution. It may even prevent a dispute from going to litigation or Arbitration.

So if you do find that an issue is arising or you are facing a dispute and you are unsure as to the outcome or even what to do next, consider seeking the assistance of a specialist consultancy, one that is well-versed in the many aspects of construction contractual matters and the appropriate methods of resolving the disputes. Just like us!

Call us for a free consultation on 01727 861510

 

photo credit: daliborlev via photopin cc

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