8. Although it is inevitable that disputes will arise during the life of a long-term PFI Contract, a well managed dispute can actually be value accretive to a relationship, rather than value destructive. Based on feedback from consultees, however, we found little evidence of situations where the parties had been brought closer to each other as a result of a dispute. Our overwhelming conclusion is that the majority of consultees that had been party to a long, major dispute came away feeling that the process had been inefficient, unduly expensive and lacking in pragmatism. We often heard consultees express concern that "value had been lost from the project" as a result of the dispute and, on further enquiry, it became clear that this comment was either referring to the amount of time and money that had been spent by all parties on legal costs, and/or the erosion of trust/goodwill between the parties that had arisen as a consequence of the relevant dispute. Consequently, we encountered numerous public and private sector consultees that had lost respect for their PFI Contract counterparty because of how they felt about how the other party had managed the PFI Contract. We have concluded that long-term disputes are typically detrimental to the relationship between the parties to a PFI Contract.
9. By definition, PFI Contracts are long-term, relational contracts. In order for them to work well, there needs to be some level of flexibility between the parties and a collaborative relationship. However, in the absence of a certain level of goodwill and trust between the parties, this can be very difficult to achieve. Disputes are clearly a threat to any PFI relationship and parties to potential disputes should be alive to this. When a dispute is finally resolved or determined by a third party, the various advisers will disappear and the commercial parties will be left to work together for the remaining years of the PFI Contract. It was discouraging to hear so many stories of how, as a result of a long term dispute between the parties, the PFI Contract had become difficult to administer and that one or more parties to the PFI project had "doubled-down" on managing the PFI Contract to the letter of the contract, without any desire to work relationally with the other parties.