Photo courtesy Arcadis
Design and consultancy firm Arcadis has released its 2016 “Global Construction Disputes,” which shows cost and time involved in solving construction disputes is rising in some parts of the world, but these expenses have decreased in North America for the third year in a row.
The report provides insight into the main causes of disputes and how to avoid, mitigate, and resolve them quickly and cost-effectively. It predicts the decline in duration and value of construction battles in North America will continue through 2016. These trends are a positive signal for the United States as they help reduce the financial drag on construction overall.
“The North American industry has become more sophisticated in recent years, realizing what we have said for a long time—focusing on managing risk and early intervention will help reduce the number and cost of disputes,” said John Jestrem, CEO of Arcadis North America.
According to this report, this continent is the only region where it is taking less time to resolve disputes. More participants are including provisions in construction contracts outlining a procedure to address disputed issues, resulting in a growing number of battles being dealt with early, while fewer are growing into full blown disputes.
“This trend is good news for the United States and Canada, but there is one downside,” said Roy Coopers, vice-president of Arcadis North America. “Even though more disputes are being settled early, the ones that remain grow into complicated, emotional affairs with large damages at stake. These also take longer to resolve, since United States courts hate to try construction cases due to their large volumes of documents and greater complexity.”
The most common cause of disputes remains to be the failure to properly administer contracts. In North America, more disputes are in the transportation, water, and wastewater sectors, while globally, more are in the property/building construction and social infrastructure/public sectors.
To read the full report, click here.
