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#Contech in Dispute Avoidance5 Mar 2019

digital technologies and data enable collaboration and integration …to drive efficiency and value.”*

If “A picture is worth a thousand words”, how many words are in a video recording at 50 frames a second? Photos and videos in construction project reporting are producing greater transparency and trust. Videos and photos are naturally considered a more reliable demonstration of evidence-based information.

Delays, liquidated damages, recovery of loss and expense, non-payment and reduced valuations are all sources of pain in the construction industry. Using more efficient digital tools will inevitably reduce these pains.

The nature of the adversarial contracting model is a key contributor to the occurrence of construction disputes in the UK.

Our legal system has created an environment that allows parties, to relatively freely agree on terms of a contract. Yet, the risks and liabilities imposed on one party may be greater than the other.

In the recent case of North Midland Building and Cyden where the first instance judge noted:

Parties are free to agree whatever terms they wish to agree, with the obvious exceptions such as illegality. There is a statutory restriction within the field of construction contracts so far as dispute resolution and payment terms are concerned… But there is no rule of law of which I am aware that prevents the parties from agreeing that concurrent delay be dealt with in any particular way.

Construction contracts include obligations on contractors and subcontractors to report on the following, to name but a few:

  • Progress and delays
  • Commercial
  • Health and safety
  • Quality control
  • KPI’s

During project delivery, efficiently administrating the contract is key to achieving those obligations. As with so many things, people and processes interact to create the results communicated to other parties.

The recipient of the information relies upon what has been produced. Trust will play a large part in how much reliance is place on the information.

Sir Michael Latham, in his report Constructing the Team, stated “Disputes will continue as long as people fail to trust one another.”

The Arcadis report quoted in the opening above, goes on to say,

“the most basic function of poor and/or untimely communication continues to bedevil projects. In many instances when the problem starts as a technical issue, it can be exacerbated by failing to tackle the issue head-on …which only causes the situation to fester…”

Building trust, a key contributor to avoiding disputes, often takes time. However, it can be expedited by demonstrating transparency in communication. Using evidence-based information the assertions made in documents can be validated.

Typically, communication between parties is in a written format. This is often in the form of emails, letters, Gantt programmes, written reports and on-site records. The nature of language means that each communication could have a number of interpretations.

So how can we improve clarity of communication? How should we ensure the recipient receives better information?

The use of digital technology to improve communication, transparency and trust is an area of increasing focus in construction.

On digital construction, Laing O’Rourke say:

“It produces increased confidence and surety of project outcome in terms of cost, programme and quality; delivering greater understanding of complex construction processes and reducing associated risks”

The use of written on-site records continues to be a challenge in the use of project delivery recording. The verbalisation of project delivery is dependent on the ability of individuals to communicate the vast number of activities undertaken by many participants.

This inevitably leads to disagreements about how, when and why elements of the works were constructed.   The use of visual, evidence-based tools and systems can lead to a greater degree of risk reduction within projects.

Visual information is providing transparency, trust and improved relationships in these areas:

  • Progress & Programme: Real time progress monitoring, project data capture and analysis, and accurate project planning.
  • Site Records and As Built-Records: Evidence of works complete and the date of completion, visual factual and as-built records of completed projects.
  • Health & Safety: Identification of on-site H&S risks, monitoring of site personnel & behaviours. This can avoid the risks of on-site incidents and accidents.
  • Commercial Reporting: Greater financial certainty of value of work to complete. Early warning of on-site changes, identifying cost savings through project analysis.
  • Quality Control: Quality monitoring remotely. Early identification of non-compliant work and reduction in re-work.
  • Project Risk Management: Taking a holistic approach to project management. Looking at the complete picture often identifies the source of the greatest risks.

Sadly there is little room for manoeuvre on contract formation, the level of risk one party has compared with the other, and resulting commercial consequences. However, other industries have demonstrated significant potential in managing contractual risks. Digital technologies can help record events and activities arising from those risks.

Advances in digital video technologies are one area where factual recording can produce a greater degree of accurate information than most methods currently used.  Where these technologies are embraced, results have proven that efficiencies have been made and losses have been reduced.

*Arcadis Construction Dispute Report 2018

 

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