In the construction industry, escalated disputes and claims are a very common occurrence. The most common reason is the complexity of the nature of construction projects. With multiple teams together, the complexity is inevitable, and hence claims are difficult to avoid.
Lack of professionalism and communication gap are the reasons the claims escalate to disputes and conflicts. Once a situation comes to that, you are faced with project cost overrun. You might even have to extend the project duration in many cases.
This article aims to introduce you to the trends in the construction industry regarding claims and disputes.
Construction Claims and Disputes Trends in the Industry for 2020
Every construction project is different in its nature, and hence the nature of problems arising during the project is also different. But still, there are some features of those problems which can be observed as a pattern. You can solve the impending problems by going through this blog post. Studying these trends can help us identify the root cause of those problems, and thus you can prevent any upcoming disputes in the project.
Following are some of the trends that require your attention:
Duration of Dispute resolution
All over the world, the trends related to construction claims and disputes have been fluctuating. In some regions, the frequency of these disputes has increased over the past year. In others like Middle Eastern countries, the value that disputes have been causing the construction projects has increased in the year 2019-2020. Commonly the reason behind this additional value or cost is the time duration that dispute resolution requires.
In most cases, construction disputes of medium-scale construction projects take around ten months or sometimes even longer than that. Hence, the cost of projects goes way beyond the estimated budget designated in the initial contract.
Increase in Recovery related Limitations
Limitations or conditions of damage recovery have become further well defined and detailed in recent times. The reason is simple: the project owners/ managers evaluate the damages for delayed completion of projects or occurrence of delay claims on the one end, and one the other hand, the contractors bring up the excuse or condition of concurrent delays.
The ever-changing economic and market situation somehow justifies this reason as well. Concurrent factors are too many to ignore, and their impacts are very obvious and known in the construction industry. With increased limitations posed, it has gotten difficult to prove the party on fault in the disputes.
There has always been inclusion of some statutes in construction project dealings. These statutes help carry out arbitrations and negotiations when any claim arises or leads to a dispute during the construction process. Now, legal bodies are governing some laws regarding construction contracts. When you are legally bound to fulfill certain conditions, dispute resolution is usually out of your hands. You need to follow what the courts have got to say.
While there is a lesser chance of claiming bodes doing anything non-serious on the one hand, the binding and following legal implications need you to stop construction work or postpone cash flows at one point or another.
Courts for legalizing commercial projects construction
All the countries over the world are making efforts to attract investors from other countries in the industry. They do so by legalizing their procedures in different sectors. For this purpose, countries like the UAE Have made construction laws. You need the help of a construction quantum expert to understand those laws and fulfill the requirements of those laws.
They need to do so because when there is any dispute, and the investor is foreign, he will need the law to be a guarantor in such cases. For this purpose, commercial courts are a new trend in the picture of dispute resolution in the construction industry and other relevant sectors.
Legal dealing of fabricated disputes
Like all industries, there are black sheep in the construction industry. People plot and plan against ongoing projects when they do not want a certain project to complete or be successful. For this reason, they bring up false claims, which then lead to baseless disputes. A party stands against another, and the project progress halts.
Legal bonding, however, helps with dealing with false claims with an iron fist. You can save the fate of the project being the project manager if you are vigilant enough to distinguish a real claim from a forged one.
Are your construction projects faced with disputes?
Well, it is understandable. Do any of the trends mentioned above resonate with your experience in the construction industry? If yes, you must realize how important it is to take a professional consultant to deal with construction claims and dispute resolution for your project tenure.
You will not regret this decision!