Introduction
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Roy Cooper, PE Arcadis | Welcome to the Ninth Annual Arcadis Global Construction Disputes Report: Laying the Foundation for Success, which reveals key themes and insights into the global construction disputes market. Any dispute is case specific, so to endeavor to group causes and develop averages can risk omitting critical information related to the overall nature of the dispute. However, given our experience researching disputes over the past year, both globally and regionally, we are confident that our findings reflect the market trends. |
Our research indicates that construction activity across the globe increased in 2018 for each of the sectors and activity will continue to remain strong. The industry will have larger construction programs of all types which will make it critical for project participants to understand the drivers of disputes.
This year's report highlights the average value of disputes dropped significantly from the 2018 report. The report also reveals the following:
• Regions that are utilizing early dispute avoidance techniques have been successful
• Human factors and misunderstanding of contractual obligations continue to be a primary cause of disputes
• Not all regions attempt to resolve disputes in the same way
Over the past nine years of gathering insights and capturing dispute trends, many of the leading causes of disputes have remained the same. This year's report explores how each region avoids, mitigates and resolves disputes.
Although handled differently due to contrasting business practices and cultures, each region utilizes techniques that have proven to be successful.
With mega projects continuing to expand around the globe, contracts, plans and the projects themselves will be more complex, and more parties will be involved in the construction process. With more project participants, it is essential for those involved to understand the contract, their role in the project, and how to work with the team.
The overall value of disputes decreased in 2018, which indicates the industry is beginning to understand the importance of addressing the human factors. However, it is noteworthy that the new leading cause of disputes is Owner/Contractor/Subcontractor failing to understand and/or comply with its contractual obligations, which emphasizes that there is still work to do.
Our report reveals that owners and project participants who are engaging in formal, contract-mandated avoidance, mitigation, and resolution techniques are reaping success. Methods now being used in several regions across the globe include:
• Risk Management
• Dispute Review Boards
• Mediation
Overall, we found that globally the construction industry is in fact learning the value of engaging in proactive dispute avoidance, mitigation and resolution techniques.
If you have any feedback or insight that you wish to share, please contact one of our regional leaders (see back cover).