DIFFUSE DISPUTES THROUGH BETTER
PROJECT MANAGEMENT
The pandemic has caused a neardoubling in the value of disputes – which means they need to better manage projects to minimise the fall out
WRITTEN BY : DOMINIC ELLIS
The average value of disputes globally rose from $ 30.7 million in 2019 to $ 54.26 million in 2020 , while the length of disputes fell from 15 months in 2019 to 13.4 months , according to a recent Arcadis report .
The data , featured in Arcadis ' 11th annual report , illustrates industry-wide ripple effects of the COVID-19 pandemic although interestingly , the overall volume of disputes stayed relatively the same in 2020 as in 2019 , contrary to what most observers would have anticipated as projects stalled and costs soared .
While trends in the value and length of disputes varied between regions , all surveyed saw an increase in " mega disputes " related to bigger capital programs and private projects . Notably , more than 60 % of survey respondents encountered project impacts due to COVID-19 .
Owners , contractors , or subcontractors failing to understand and / or comply with their contractual obligations became the leading cause of construction disputes in 2020 ( jumping from 3rd place in 2019 ), followed by owner-directed changes and third-party or force-majeure changes as the second and third-leading causes , respectively .
Highlights from the report include :
• Proper contract administration was a theme across the globe for the successful and early resolution of disputes
• Most disputes were settled through party-to-party negotiation , and a willingness to compromise played a key role in early resolution
• Among regions surveyed , the buildings ( education , healthcare , retail / commercial , government ) sector saw the most disputes
40 August 2021