Construction Dispute Resolution​

A good lawyer will have future disputes in its contemplation when drafting the construction agreements, and thereby do what it can at that stage to minimize the risk of disputes occurring, and put in place provisions for managing them effectively if they do arise. A key aspect of that will be considering how the payment and adjudication provisions in the Housing Grants, Construction & Regeneration Act 1996 (as amended), will play out under the contract.

We are firm believers in parties identifying and addressing potential disputes as early as possible. Delay usually only works to entrench positions and allow ill-will to set in. If parties can negotiate and compromise their different points of view early, often the problem can be managed away.

If a mediation or some other formal managed compromise procedure is needed, then to do that early on is usually a sensible idea. The Courts have been encouraging that approach for some years now.

This pro-active approach to disagreements should also limit legal costs, as lawyer involvement should then be far less than when a dispute gains momentum.

However, adjudication, as a widely available tool for construction dispute resolution, can in many ways work against this early, collaborative philosophy towards getting rid of disputes. That is because parties with a right to adjudicate can do so “at any time” (as long as a dispute has crystalised, which doesn’t take much), can get the process completed quickly (in 28 days) and at limited cost since parties rarely pay an opponent’s costs if they lose. Adjudication is therefore low risk and very available.

We have a great deal of experience of adjudication. It remains the primary form of dispute resolution in the construction sector, applying as it does only to construction contracts as defined in the 1996 Act. Contracts where a party will occupy the property being constructed as its residence, are an important exclusion from the right to adjudicate.

As well as the adjudication procedure itself, we are very familiar with the procedure for the enforcement of adjudication Decisions and the means for resisting enforcement. That is all carried out in the specialist court for construction disputes: the Technology & Construction Court (TCC).

In addition to adjudication, we have advised clients in numerous litigation (court) and arbitration proceedings. The former are far more commonplace than the latter, not least because most construction contracts stipulate litigation, not arbitration, as the means of dispute resolution under the contract. However domestic and international arbitrations remain an important part of what we do.

We also advise clients on less common methods of dispute resolution, eg expert determination, early neutral evaluation and dispute boards.

We understand the pros and cons of all these different methods, and how some will be more or less suited to the particular parties, project, contract and dispute that we are asked to advise upon. Similarly we understand how changing domestic and international, economic and political environments such as those that we face today, change the suitability of each of these dispute resolution methods over time.

Finally, it is vital to always be clear with our clients, that dispute resolution proceedings should usually be a last resort and other outcomes should normally be fully explored before getting to that stage. That is because proceedings are damaging to contractual relationships as the system we have in this country is very adversarial. They also create the risk of significant financial disadvantage to the loser, especially in the form of having to pay the winner sometimes large awards of damages, and having to pay significant amounts of legal costs both your own and your opponent’s. Even a successful party rarely recovers all of its legal costs and so may have a material financial outlay too. Proceedings can even lead to an unsuccessful party having to close its business given the financial punishment that it receives.

Our approach to dispute resolution is sensitive to all the above issues