disputes

Welcome to the first Hewitt Decipher Partnership blog of 2020. This month I’d like to talk about disputes and take the findings of HKA’s report, Claims and Dispute Causation – a Global Market Sector Analysis a step further than I did in last months’ blog, which concentrated on the importance of adequately expressed claims.

I also wish to refer to ARCADIS’s Global Construction Disputes Report 2019. Between them, these reports between cite the following reasons for projects going wrong and things escalating to disputes:

  1. Poorly drafted contract requirements;
  2. Errors or omission in the contract documents;
  3. Contract management and/or administration failure;
  4. Failure to serve appropriate notice under the contract;
  5. Parties failing to understand and/or comply with its contractual obligations; and
  6. Level of skill and/or experience.

You can fix all of the above pretty inexpensively, so why does the industry continue to make the same mistakes?

Let’s go through each of the 6 causes and look at how to avoid them.

The contract requirements are absolutely fundamental to claim and dispute avoidance and to the parties understanding their obligations. Peer reviews of structural and other design matters are greatly important and are often contractual obligations. Poorly drafted contract documents and errors and omissionsin the contract documents will usually be identified by an expert in such matters. So why not carry out a peer review before finalising the contract? Could it be that the people responsible think that their contract documents are perfect? HKA and ARCADIS both say that this is not the case. So maybe it’s just a case of those responsible not wishing to spend money on this type of expertise. Considering the potential cost of claims and disputes brought about by poor quality contract documents, it seems to me that this is a penny wise, pound foolish approach.

Problems caused by contract management and/or administration failure, the parties failing to understand and/or comply with their contractual obligations and failure to serve appropriate notices can all be easily and again, pretty inexpensively, fixed.

Project staff, or at least key staff, should have a thorough understanding of the contract. And if they don’t have this, then they should be provided with appropriate education and training. Contract management and administration systems should be appropriate to the contract and the project. You should gain expert assistance and advice at the beginning of the project and then implement health checks. This ensures that such systems are in place and operated correctly. Again, a small investment in expertise at the beginning of the project will more than repay itself during the lifespan of the project.

Finally, poor levels of skill and experience can be addressed by ensuring that the project personnel are well trained in the meaning, use and obligations of the contract, or by bringing in outside expertise to advise and assist.

Hewitt Decipher Partnership’s expert consultants have been preparing and responding to claims for many years and we know how to comply with all of the above advice to ensure that your claims are accepted in a timely manner.

Can we help you? Get in touch via our contact page; we would be happy to discuss any support that you may need.