What causes construction disputes today?

Charles Wilsoncroft

Conflict over contract interpretation has become far less of a problem on UK construction projects – but design errors are still the leading cause of disputes, shows new research

Every contract is an allocation of risk, whether or not the parties desire or fully recognise that. Their routine failure to manage such risks is fuelling the heavy toll of claims and disputes on projects.

These real-life impacts and their underlying causes have been investigated by consultants HKA, on capital projects around the world. The fifth annual CRUX Insight Report quantifies the costs of such conflicts, as well as outlining steps to pre-empt or mitigate them.

Across 1,600 projects in 100 countries with a combined capital expenditure value of more than $2.1tn, the losses in time and money are stark – and so is the stubbornly familiar pattern of causation. The eye-watering sums in dispute amounted to 38.3% of project capex in Europe, higher even than the global 35.3% average. Extensions of time sought by contractors would prolong a typical project by more than 60% of its planned schedule.

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