Construction disputes taking longer to resolve

By Helen Wright20 May 2013

The time taken to resolve legal disputes in the construction industry rose last year to nearly 15 months, compared to an average of nine months in 2011, according to a report by consultants EC Harris.

The average length of disputes rose across Asia, the Middle East and the UK. Disputes are taking longest to resolve in the Middle East, with an average of 14.6 months, although Asia was not far behind with 14.3 months.

In contrast, disputes in the US and Europe were becoming quicker to resolve in 2012, with US disputes taking slightly under a year at 11.9 months.

The report stated that the top five causes of construction dispute revolve around a mistake or failure, which makes them all avoidable to varying degrees.

However, the average value of disputes around the world dropped slightly year-on-year in 2012 to US$ 31.7 million, compared to US$ 32.3 million the year before.

But there were big variations around the world – in the UK, for instance, dispute values have been well below the global average over the past two years, but jumped to an average value of US$ 27 million in 2012, more than double the US$ 10.2 million value in 2011.

Elsewhere, dispute values fell across all regions, although the Middle East still experienced the largest disputes at an average of US$ 65 million.

EC Harris global head of contract solutions Mike Allen said, “Looking into 2013, there are healthy construction programmes in the Middle East, Asia and a recovering market in the US. Combined with the continued use and growth in international arbitration and the extensive infrastructure and energy related programmes underway in established and developing countries, this indicates to me that 2013 will not reverse the previous growth of disputes worldwide and be another busy year for dispute professionals.”

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