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North American Construction Industry Sees a Significant Increase in the Volume of Disputes

Recently, Arcadis released their tenth annual Arcadis Global Construction Disputes Report, which aims to provide key themes and insights into the global construction disputes market. While the report revealed that all regions saw an increase in mega disputes related to private projects and larger capital programs, this brief editorial will touch on the finding that dispute values, durations, and volume all increased over the past year in North America. We’ll also discuss the most common dispute causes, solutions looking forward, and how partnering with a Miami construction litigation attorney from Cotney Construction Law can help best protect your business.

Related: A Look at Common Construction Disputes

What Can Be Attributed to the Rise in Volume and Length of Disputes?

Globally, human factors and misunderstandings of contractual obligations persist as the primary cause of disputes. However, in North America, the number one cause of disputes shifted for the first time in five years from errors and omissions in the contract documents to the contractor/subcontractor failing to understand and/or comply with their contractual obligation. Following errors and omissions in contract documents, poorly drafted or incomplete and unsubstantiated claims are tied with owner-directed charges and an unrealistic contract duration or completion date. 

In cases where the project manager was the main point of influence in the dispute, the common cause could be linked back to a lack of understanding of the procedural aspects of the contract. The common threads are ultimately breakdowns in communication and lack of collaboration in preventing and resolving the dispute. This serves to highlight the immense need for all parties involved in a project to be equipped with a clear understanding of the contract documents if they wish to avoid coming across disputes during the course of the project. 

Related: 3 Root Causes of Construction Disputes

What Are Our Solutions Looking Forward?

At a glance, the most common resolution techniques used during 2019 in North America may seem promising with mediation moving from the number two spot it maintained in 2018 to number one in 2019. What we need to keep an eye on, however, is litigation, which moved into the number three spot for 2019. Although litigation still ranked below mediation and party-to-party negotiation, this is the first time in years that litigation has ranked in the top three methods of dispute resolution. Arcadis attributed this shift to an increase in disputes where the participants of the construction project were more likely to remain steadfast in their positions even if it meant moving forward with litigation. 

Looking forward in 2020, it’s inevitable that the construction industry will be dealing with the fallout of COVID-19 on all types of projects. Different areas of North America will be faced with varying degrees of impact, leading to further considerations and issues for firms with locations in multiple states. Already, we have seen the interpretation of force majeure and suspension clauses to be a primary factor in whether or not a dispute evolves into something bigger. As with all regions of the world, collaboration between project participants is expected to be essential moving forward for the remainder of this year. 

Related: Resolving Construction Disputes

How Can a Cotney Construction Law Attorney Help Protect My Business?  

When construction companies are left to resolve disputes on their own without the aid of one of Cotney Construction Law’s experienced Miami construction litigation attorneys, it’s easy for even a minor dispute to evolve into the costly and time-consuming litigation process. Our team of attorneys have handled a wide variety of construction arbitration, mediation, and litigation cases that arise between owners, contractors, subcontractors, developers, engineers, and architects and are prepared to work diligently with you to negotiate and settle your case without the need for a court proceeding. If a trial is necessary, however, we are also equipped to aggressively present your case before a judge and develop a strong defense, complete with opening and closing statements.  

If you would like to speak with a Miami construction litigation attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.