For the first time in five years, the most common cause for disputes in North America shifted from errors and/or omissions in the contract documents to contractor/subcontractor failing to understand and/or comply with its contractual obligation. This reiterates the need for all parties involved in a construction project to have a clear understanding of the contract documents in order to avoid costly delays that come with disputes on a project. In line with this, when the project manager or engineer was the material influence in the dispute, the most common cause was a lack of understanding of the procedural aspects of the contract.
The top causes in this report and those from prior years indicate that human factors such as biased opinions, relational breakdowns and a lack of collaboration are common threads in the failure to resolve construction disputes. We also found that the most important factor in the mitigation / early resolution of disputes was transparency between the parties and a willingness to compromise.
Poorly drafted or incomplete and unsubstantiated claims - new to the rankings in 2018 - stayed in the third position for North America, tied with owner-directed changes and an unrealistic contract duration or completion date.
When you couple this year's results with previous findings pointing to biased opinions, relational breakdowns and a lack of collaboration as top dispute causes, a common thread emerges. The human factors lead to more disputes than anything else.