Construction industry disputes reaching the High Court have leapt over the last three years in the wake of the Carillion collapse. Around 400 construction cases were heard by the Technology & Construction Court in 2019, up by nearly 28% on 2015/16.
Advisory firm, Accuracy, which analysed the figures, said that the failure of Carillion had made owners and developers more likely to resort to litigation.
“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 Hervé de Trogoff, a partner at Accuracy.
Mr de Trogoff told Building magazine that developers were no longer willing to overlook claims with long-term partners, in the hope of recovering costs on future schemes. “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,” he said.
Zoe Stollard from solicitors Clarke Willmott said firms must check the wording of contracts to make sure that it clearly sets out how payments should be dealt with, and the implementation of the provisions of the contract. “While this may seem basic, all too often we see issues arising around requests for payments and the valuation of an application, simply because notices are issued incorrectly, or are not issued at all,” she said.
James Burgoyne, Director – Claims & Technical, Brunel Professions believes that the difficult trading conditions facing contractors means that the number of disputes will continue to rise. “We’ve seen the collapse of Carillion, profit warnings from big players like Kier and Galliford Try and the buyout of Interserve,” he said. “Firms of all sizes are facing a greater risk of litigation and need to make sure that their professional indemnity insurance is appropriate to accommodate the greater risks they face,” he added.
A total of 397 construction related disputes were heard in the UK’s Technology and Construction Court in 2019, up from 311 in 2015/16. Reports of Accuracy’s research have been published by Building, City AM and Construction Industry News.
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