There are many challenges facing the Australian Construction sector. We’ve already seen increased challenges with commodity and currency volatility, and have already suffered with mining sector declines. The uplift we did see in oil and gas looks to be nearing completion of its capital expenditure stage. So within that background and context, construction disputes represents another cost and another risk associated with these major projects.

Top five causes of Construction Disputes globally were:

  1. Failure to properly administer the contract.
  2. Poorly drafted or incomplete and unsubstantiated claims.
  3. Errors and/or omissions in the contract document.
  4. Incomplete design information or employer requirements (for D&B/D&C).
  5. Employer/contractor/subcontractor failing to understand and/or comply with its contractual obligations.

Don’t get left behind

A continuing trend over the last six years is that globally on average disputes have increased in value and duration, with the notable increase this year in the length of time taken to resolve disputes. Therefore the focus is around making sure that in recognizing what causes disputes, avoidance mechanisms can be actively deployed to resolve issues as they materialize.

Furthermore, if then a claim does progress into a formalized dispute, actively deploying key support and expertise, effective strategies and the active use of Alternative Dispute Resolution (ADR) will assist in reducing the time it takes to resolve the dispute.

Failure to properly administer the contract holds on to its top position globally from last year as the main cause of construction disputes. To address this, party to party negotiation is also remaining as the most popular method of alternative dispute resolution.

In Australia, there is a real opportunity for Construction firms to employ effective dispute avoidance mechanisms and deploy them as early as possible within a project. By finding the right expertise and support at the right time some of these disputes can be reduced in length, or better still be avoided altogether.

Project Support  has Construction Dispute professionals that are experienced in dispute resolution. Please get in touch to find out how we can help.