In June 2021, worldwide construction industry consultant Arcadis published its 2021 Global Construction Disputes Report.
The report shows that in 2020, an exceptional year for many, the worldwide average value of construction disputes increased significantly to US$54.26m (from US$30.7m in 2019), while the average length of the dispute period continued to drop to 13.4 months (from 15 months in 2019).
More than 60 percent of survey respondents encountered project impact due to COVID-19. Not surprisingly, force majeure and third-party impacts entered into the top three causes of disputes in 2020, with owners/contractors failing to understand and/or comply with contractual obligations taking the top spot, moving up from third in 2019. A party’s failure to understand and/or comply with contractual obligations, the report states, has an easy cure: adequate training and effective advice before and during contract performance.
According to the report, the top three most important factors for early resolution of disputes are: (1) owner/contractor’s willingness to compromise, (2) accurate and timely schedules and reviews by project staff or third parties, and (3) transparency of cost data in support of claimed damages. These are all important considerations to keep in mind as construction activity across the globe continues to increase while there are labour and material shortages worldwide.
Read the full 2021 Global Construction Disputes Report here:https://www.arcadis.com/en/knowledge-hub/perspectives/global/global-construction-disputes-report.