Picture this: You’re heading up a complex construction project that has stalled due to one of your sub-contractors experiencing weather-related delays.

This wouldn’t be a huge deal, if only they had communicated this with you right away, provided adequate proof of why works couldn’t continue and given you the chance to find an alternative solution – as was stated in their contract.

But, due to a misunderstanding of contractual expectations and poor communication from their side, you’re now left with halted progress, escalating costs and a strained relationship with the contractor. You’re not sure how to proceed, what to tell the other contractors involved or when the project is likely to be completed.

Does this scenario sound familiar?

This is a prime example of a construction dispute.

Thankfully most projects avoid falling into dispute, but it is almost inevitable that sooner or later, you will find yourself involved in a dispute of some kind. However, with the right know how and a proactive approach, its impact can be mitigated, managed and resolved effectively, reducing the knock-on effects to your business and project delivery.

In this blog, we will explore various resolution methods you can use to better navigate disputes if they arise, as well as helping you identify which solutions offer the best balance of time and cost savings.

Here at Novus Resolve, we’re a firm of Chartered Quantity Surveyors who specialise in dispute avoidance and resolution. Our expert teams have been involved in some of the largest and most complex projects in the world, helping clients identify problems, resolve conflicts and uncover successful resolutions quickly and painlessly.

Construction disputes can range in size and severity from relatively minor disagreements that are easy to resolve to large-scale legal battles that take months or even years to find a conclusion.

Some common causes of construction disputes include:

• Contract misinterpretation/non-compliance

• Payment issues

• Project delays due to unforeseen events such as difficult ground conditions, inclement weather or geo-political events like covid or the Russia/Ukraine war

• Contract errors

• Differing site conditions

• On-site changes

The impact of disputes can also be varied and far-reaching. Typically, they will lead to some combination of project delays, escalating costs and clashes or friction between contractors, sub-contractors and property owners.

No matter the type of dispute you’re facing or what has caused it, early intervention by a legal professional and proactive dispute resolution strategies will be critical to nipping issues in the bud early and minimising the impacts on your business or projects.

With this in mind, we’re here to help you understand the dispute resolution methods you can use to protect your own interests and ensure a seamless and successful project completion.

As we said previously, early intervention and acting proactively will be integral to avoiding costly and long-winded disputes. There are multiple resolution methods you can try - all of which will have their own pros and cons.

To properly handle a dispute, you will have to consider the unique circumstances and factors at play. To help you make the right choice, here’s a brief breakdown of five of the most common dispute resolution strategies...

Negotiation is a strategic discussion between two (or more) parties where the goal is a resolution everyone is happy with. Typically, negotiations will require compromise from one or all parties, with you having to make some concessions to find a happy medium.

The negotiation process should look a little like this:

• Preparation – All parties should identify what they hope to gain and the concessions they’re willing to make. This might involve researching the other parties involved and compiling evidence to support your goals and perspective.

• Exchanging information – All parties share their positions, goals and what they’re prepared to compromise. Effective listening is required here to help you uncover a true win-win solution.

• Bargaining – Once everyone has shared their positions, it’s time to bargain. It’s important to avoid being dismissive or argumentative, and to be open to compromise.

• Finishing up – Once you’ve found a resolution that all parties are happy with, negotiations will end with either a verbal agreement or written contract.

The benefit of negotiation is that it’s simpler and offers more flexibility and control than other strategies. As it can be as simple as a conversation between different parties, it’s also a lot more cost-effective and can offer a quick solution to smaller disputes.

Critical to negotiating is listening and communicating well. You want to fully understand the other party’s position, clearly articulate your point of view and goals and be open to compromising.

Like negotiation, mediation can be a cost-effective solution for resolving construction disputes – this time, with a neutral party guiding the conversation.

Following the same stages as above, mediation is a strategy that encourages co-operation and collaboration. A mediator will aid negotiation and communication between the parties involved, creating an open and honest environment for you to share your concerns, interests and find common ground with the other parties.

Rather than providing legal advice, the mediator’s role is to ensure each party can express themselves and that the discussion remains focused, productive and moving towards a mutually beneficial outcome.

Thanks to the mediator’s presence and guidance, mediation can leave all parties feeling seen, heard and understood, and can help to protect and maintain your working relationships moving forward.

Adjudication is a relatively quick way to resolve construction disputes, giving you a binding decision from an independent expert in just 28 days. Since the right to refer disputes to an adjudicator was introduced in The Construction Act 1996, it’s become a common way to settle disputes on an interim or temporary basis.

How adjudication works:

• A party involved in a contract will serve a Notice of Adjudication and Referral Notice that fully details the claim.

• All parties involved will agree upon an adjudicator and settle the terms of the adjudication.

• The responding party will serve a response to the adjudicator.

• Typically the referring party will serve a reply to the response – this is often the end of submissions but further submissions may be permitted by the adjudicator depending on the complexity and size of the dispute in hand

• Whilst the timetable and number of submissions is usually determined by the adjudicator, convention is the referring party has the last say.

• By 28 days, the adjudicator is required to reach a binding decision but this is often extended by 14 days.

• Their decision can later be enforced in court if necessary.

The decision made by an adjudicator will be temporarily binding i.e. only until finally determined in litigation or arbitration but in practice, the majority of decisions are accepted by the parties. Because of this, adjudication is usually most appropriate for providing quick solutions and getting projects back on track although it can still be a costly process. For more complex disputes, arbitration or litigation might be the better course of action, especially as typically in adjudication, each party bears its own costs, even if it wins.

Serving as an alternative to conventional litigation, arbitration is a private method of dispute resolution with a process often likened to that of litigation . A dispute will be heard and resolved by an arbitrator(s) – usually a senior lawyer or retired judge – who has been selected by the parties involved, rather than a judge in a court of law.

The benefits of arbitration as a resolution method include:

• Control – All parties will work in agreement to decide on proceedings, giving you more control over the process and allowing you to align it to the specific case at hand.

• Finality – As the arbitrator’s decision is final, it can bring about a swift conclusion, avoiding a lengthy and costly court process.

• Privacy – Whereas court proceedings are open to the public, arbitrations are closed, giving you more privacy and allowing you to protect sensitive information.

• Convenience – In litigation, you're at the mercy of the courts when it comes to trial dates and how quickly events can proceed. With arbitration, dates can be agreed between the parties and their witnesses.

Unlike the previous methods, though, arbitration can be more of a long-winded process, and could open you up to legal fees and additional costs.

In these cases, where negotiation or alternative methods haven’t worked, a judge will decide on the rights and obligations of each party. The outcome might be a re-outlining of contractual rights or damages related to breaches of contract.

With litigation in construction specifically, an expert witness might be required to provide independent assistance to the court or a party involved. They will work to fill gaps in the judge’s industry knowledge and provide important details and insight to help the court reach a fair conclusion.

The litigation process involves:

• The Pre-Action protocol for Construction and Engineering Disputes

• Filing a claim

• Exchange of pleadings and evidence (factual and expert if required)

• Trial

Litigation, although incredibly effective at finding a resolution, comes with several drawbacks for the parties involved. These can include high costs, a long, drawn-out process, long-term damage to working relationships, and public exposure.

Unlike arbitration, you’ll also have no control over the proceedings and no right to privacy throughout. Because of these drawbacks, it’s important to have the right expert support by your side throughout the litigation process.

When it comes to deciding how to proceed with construction disputes, it’s essential to consider the specific circumstances surrounding each case. While complex cases might require going to court, a lot of cases can easily be resolved with Alternative Dispute Resolutions (ADRs).

For simpler disputes, negotiation and mediation might help you find quick and easy solutions. If you’ve got a bigger dispute – but are keen to keep a project moving forward – adjudication could provide a quick, temporary solution and help you avoid further delays. Meanwhile, for complex cases where negotiations or mediations haven’t been effective, it might be time to consider arbitration or litigation.

No matter the nature of a dispute, early action will be critical.

By being proactive when resolving disputes, you will find quicker resolutions and can sometimes avoid going to court entirely. By taking advantage of ADR methods, where appropriate, you can avoid a lot of stress and reputational damage, as well as saving time and money on legal fees and project downtime.

While it’s not always possible, the best resolution to a construction dispute will always be one where all parties come away satisfied, and the working relationship can be maintained. Damaged internal and external relationships can be detrimental to project success and could lead to further friction or tension in later projects.

At Novus Resolve, we bring extensive experience and expertise in expert witness services and commercial management. We’re also RICS regulated, which offers our clients additional peace of mind about our knowledge, standards and level of service.

In disputes of all size and scope, we’re committed to providing prompt, expert advice and efficient solutions that leave you feeling satisfied and minimise project disruption.

David Daly – our Managing Director – brings ample commercial experience in dispute avoidance, management and resolution across healthcare, residential, office, insurance and energy sectors. His personal approach and dedication to quality make him a top choice for cases both large and small across the construction industry.

With any construction dispute, early intervention is key. The sooner you act, the sooner you can find and act upon a solution you’re happy with.

With a range of dispute resolution strategies at your disposal, it’s important to consider the unique circumstances of your case. As well as what you hope to get out of the resolution.

If speed and simplicity are important, it might be worth trying negotiation, mediation, or adjudication first. But, in a complicated case where negotiation hasn’t worked, litigation or arbitration could be your best bet.

No matter the method you choose, it is always beneficial to seek expert guidance and support as you strive for resolution. With a trusted partner like Novus Resolve by your side, you can remove a lot of the stress and uncertainty, as well as wasted time and resources out of dispute resolution.

For expert construction dispute resolution support, schedule a consultation with the Novus Resolve team today: https://novusresolve.com/contact