Construction disputes still prevalent


NBSThe National Building Specification (NBS) has revealed the results of its third major survey into construction contracts and related legal issues.

The results come at a time when British construction output is stronger than at any point since 2008 and show that despite market buoyancy, the number of disputes within the construction industry remains unchanged in recent years.

In 2012, 90% of respondents thought the number of disputes in the construction industry had increased or stayed the same, and in this year’s survey that figure was the same, with extensions of time being cited as the main cause.

Whilst during the recession this was attributed to lack of work and low-value contracts only being made profitable through disputes, the changing market suggests this is not the case and that the adversarial legal process is an inherent issue in the construction industry.

Other aspects of the results were more encouraging with 62% of respondents reporting that they have been involved in some collaborative working in the last 12 months, and most (81%) believing it enabled information sharing and reduced the number of disputes that arose (65%).

NBS says Building Information Modelling (BIM) has been introduced to address one of the major barriers to collaborative working – the lack of clear definition of responsibilities – but the report suggests that the legal framework needs to evolve to recognise and accommodate the changes this brings. Only 14% of those taking part in the survey currently have BIM fully integrated into contracts.

The research also concluded that there have been significant changes in the forms of appointment that people use. The use of bespoke contracts has risen from 42% in 2011 to 51% in 2015 and use of the NEC Professional Services Contract has risen from 15% to 37% over the same period.

NBS says organisations are increasingly using contracts that are better suited to higher value, collaborative projects. Figures provided by NBS suggest that there has been an increase in the use of NEC and FIDIC contracts, whilst use of JCT contracts has fallen.

Adrian Malleson, head of research, analysis and forecasting at NBS, said: “The results of the survey offer a valuable insight into an industry that is open to increasingly collaborative working, yet at odds with an often combative legal process. The number of respondents (981), including clients, contractors and consultants offers an all-encompassing view of the industry and will allow each group to better understand the issues facing each other, in the hope each may collaborate better.”

Respondents included members of more than 20 industry bodies, who shared their legal and contractual experience of the last 12 months to provide an overarching view of the construction industry. NBS has previously conducted this survey in 2011 and 2012 and whilst the economic climate was very different on each occasion it says that the resulting themes remain the same: the need for collaboration, the damaging effect of disputes and the often adversarial character of construction.

The full report can be viewed here.

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