US construction disputes over cost and time buck global trend: study

The 2016 Arcadis report revealed North American construction firms are resolving disputes quicker and contract conflicts are costing less

Construction & Engineering

By Allie Sanchez

A recently released global construction industry study revealed that the cost and time involved in resolving disputes in North America have decreased for the third year in a row.

This decrease runs opposite to the global trend, which reflects rising cost and time resources spent, the Global Construction Disputes report indicated.

According to the study, North American construction disputes averaged $25 million in 2015, which is 46% lower than the global $46 million average. Length of dispute prior to resolution also averaged 13.5 months, 13% faster than the global 15.5 month average.

The North American downtrend on dispute resolution time and costs is expected to ease the financial drag on the overall construction industry.

Further, the report said clients and contractors have begun to appreciate the high cost and the amount of time formal dispute resolution entails. The resources involved include legal fees, consultant fees and business distraction.

To address such issues, the industry has resorted to quicker and less resource-intensive ways of dealing with disputes. Specifically, most major contracts now include a dispute resolution process so that they are able to nip issues in the bud, before they become full-blown, with the help of active field staff. 

Most US courts also shy from such cases because they are often complex and require large volumes of documentation.
 

Keep up with the latest news and events

Join our mailing list, it’s free!