Disagreements in construction projects can quickly become costly, stressful, and time-consuming. By taking proactive steps at the outset, parties can minimise risk, protect relationships, and keep projects running smoothly.
- Pre-qualify before tendering
Check experience, financials and references. Time spent on reconnaissance is seldom wasted.
This was my dad’s favourite saying and was usually followed by an unappreciative chorus of “yes, we know”. He was a civil engineer and specialised in geology, so for him it was about investigating the sub-surface conditions of the site before anyone designed the bridge or whatever on top of it. He was right, though, and it applies not only to worrying about the metamorphic layer but just as much to pre-qualification of contractors. It’s tempting, particularly for an inexperienced client, to just get on with it, but choosing your tender list is not that something that should be skipped or truncated. Your chosen contractor is going to be trusted with a lot of money and to deliver your project on time, on budget, and at the right quality. Invest some time in making your choice, and don’t automatically choose the cheapest. There’s usually a reason why they’re cheap.
- Use the right contractor for the project
Make sure it's clear, consistent and certain. Signed and dated.
My blogs “Cementing the basics” go into this. Setting the contract up correctly from the beginning is essential, but, to make sure that the provisions you have so carefully chosen and negotiated actually work, actually signing and dating gives you a line in the sand when it comes to an argument. You can be clear about what was agreed, and when, and what was included if the document that sets it all out had demonstrably been agreed by both sides. Even if there is a disagreement about a drawing, at least the parties won’t have to go to court to confirm what the contract said about dealing with the problem.
- Don't put the contract in a drawer
Follow the procedures - they're designed to protect both parties.
It is common, during negotiations, for someone to say “we just stick in a drawer once it’s signed and just get on with the job”. When this happens, I have a habit of shocking both clients and contractors by delivering them a speech from A Man for All Seasons. I “did” the play for O level, and the line “and when the last law was down and the devil turned on you, where would you hide, Roper, the laws all being flat?” has always struck with me as being as just appropriate to contracts. If you ignore the contract procedures, if you cut what Sir Thomas More called a “great road through” them then when you need them, they won’t be there, and you will have no means of resolving the dispute using the pre-agreed methodology.
- A claim doesn't have to become a dispute
Address issues early and negotiate before things escalate.
I am of the view that the term “claim” is unfortunate. In these days of “where there’s blame” the word has come to mean a court case, but what it is, in the context of a construction or engineering contract, is really a request for e.g. more money or time because the contractor believes the contract entitles him to it. The contract provisions, if properly drafted, will state clearly in what circumstances the parties have a claim, whether it’s for loss and expense or LADs. The contract will also state how such entitlement is to be determined - in those two examples a job for the contract administrator using their professional expertise, or reliance on a notice of non-completion having been issued. It is only if one party doesn’t agree with the decision that it can become a dispute.
Since 1998 parties to a construction contract have had the right to adjudicate in the event of a dispute; Parliament did not refer to “a claim”, but specifically required a crystallised argument. If there is a claim, it need not become a dispute if the parties negotiate sensibly. There may be a commercial basis to the agreement, or they may agree to deal with it at final account stage and see if it comes out on the wash, but however it is done and however much os a compromise both parties may need tp accept, it is always better than protracted litigation or fast and furious adjudication.
- Communication is key
Regular, open dialogue is the foundation of a successful project.
Whatever happens, the parties and the contract administrator need to talk to each other from tender stage until the end of defects rectification. If they have not worked together before they will need to get used to each other’s ways of operating, of understanding what is expected and to understand on a human level what is happening to avoid misconceptions and misunderstandings and to establish a positive and productive working relationship. The French would say “tout comprendre c’est tout pardonner” and whilst some things may not be able to be pardoned, comprehension is a good start to solving any problem without it ending in a dispute.