Introduction
Roy Cooper, PE Head of Contract Solutions, North America | Welcome to the tenth annual Arcadis Global Construction Disputes Report, 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 range and depth of experience over the past year, both globally and regionally, we are confident that our findings reflect the market trends. |
Arcadis
Our research indicates that worldwide construction activity started strong in 2019, but the future remains uncertain due to the COVID-19 pandemic. Serious challenges are anticipated globally, from project suspensions and restarts to industry-wide shortages of labor and materials. In addition, hurdles related to schedule and cost on suspended and new projects will need to be overcome. How the industry collaboratively responds to the many challenges that flow from the pandemic will play a large role in the quantity, duration and value of construction disputes in 2020 and beyond.
This year's report reveals that the average value and length of disputes dropped slightly from the 2019 report, but it remains to be seen if those trends can continue in a post- COVID-19 environment. It is worth noting that the results of the 2020 Global Construction Disputes Report were compiled prior to the COVID-19 outbreak.
The report also reveals the following:
• The value and length of disputes continue to differ from region to region.
• All regions saw an increase in mega disputes related to larger capital programs and private projects.
• Sophisticated forms of dispute avoidance such as risk management continue to gain favor across the industry.
• The industry is facing an uncertain economy, with some regions experiencing significant growth and others encountering tighter markets.
• Consistent with previous years, human factors and misunderstanding of contractual obligations continue to be a primary cause of disputes.
Over the past ten years of gathering insights and capturing dispute trends, many of the Leading causes of disputes still revolve around the parties' failure to understand their contractual obligations related to contract administration. This is not surprising, as we have seen over the years the industry has become more sophisticated and owners are requiring a more formal dispute resolution process. In some cases, this leads to more successful outcomes while extending the duration of time it takes to resolve the dispute.
This year's report highlights that collaboration between project participants will be a key factor in successfully avoiding, mitigating and resolving disputes.
If you have any insights or questions regarding construction disputes or the report findings, please contact one of our regional leaders.