The rankings of the top three dispute causes for the UK remains as listed in 2017. It is a worrying trend for the UK construction industry that a failure to properly administer the contract continues the previous four years' findings as the number one cause of disputes in the UK.
Delving deeper into potential rationale for these findings, the role of the contract administrator becomes prominent. The Project Manager (PM) and Engineer's conduct was determined to be at the heart of how disputes crystallize over 75% of the time.
When the PM or Engineer is the material influence in the dispute, the most common cause experienced is a lack of understanding of the procedural aspects of the contract. Unsurprisingly, almost two-thirds of the survey respondents stated proper contract administration would have had the single largest impact in avoiding the disputes they were involved in.
A further sign of concern for the UK construction industry is the continued occurrence of the second most common dispute cause Employer/Contractor/Subcontractor failing to understand and/or comply with its contractual obligations.
Do our results suggest construction contracts are too complex for the parties and administrators to understand, or simply that parties still adhere to historic traits rather than embracing new ideologies? With new standard form contracts including JCT, NEC and FAC-1 being recently released, could this provide an opportunity for improvement in this area?
While the dispute causes show concerning trends, it is encouraging that the most common period where resolution of disputes occurred is settlement prior to proceedings. Supported by the findings that party-to-party negotiation is the number one method of resolving disputes this shows a promising attitude by parties in the UK.
Our survey results show the key element in determining whether the outcome of a dispute was a success for the participants involved is balancing the cost of resolution against the value of the outcome. Positively, parties appear to be considering the impacts of the dispute resolution processes against the time, commercial and relationship aspects of their projects.