Carillion collapse blamed as annual figure heads towards 400 mark
The number of High Court disputes in the construction industry has risen for the third consecutive year, according to figures released by a financial advisory firm.
A total of 397 construction related disputes have been heard in the UK’s Technology and Construction Court in the past year, up from 311 in 2015/16.
The fastest rise in disputes occurred in 2017/18 in the wake of the collapse of Carillion, the contractor which built the Rolls Building (pictured), the new home of the TCC on London’s Fetter Lane.
Accuracy said Carillion’s collapse had made developers more scrupulous in their approach to contract management and dispute resolution, resulting in the number of claims going up.
“Project owners and developers are in a post-Carillion world – the days of taking the long view and relaxing contractual or commercial postures are over,” said Accuracy partner Hervé de Trogoff. “That’s driving a long-term rise in disputes reaching litigation.”
De Trogoff also suggested that following Carillion’s implosion last January nervous developers were no longer prepared to overlook claims on one job in order to recover them on future schemes – in case some firms went bust in the mean time.
He said: “A few years ago, some limited cost over-runs might have been accepted, in the knowledge that they would balance out over the long-term on other projects. Now, taking account of the tighter contractual pressures applied to contractors or suppliers, there’s a risk that there may not be a long-term.”
And he said developers were now less worried about beginning legal action against firms they have traditionally had long-term relationships with.
He added: “The weakening of these relationships mean it is now a much easier decision to litigate against a contractor and work with one of its competitors on the next project.”
The rise in dipsutes between the 2015/16 and this year represents a jump of nearly one third.