Thursday 5 December 2019 12:01 am

Construction disputes rise as Carillion fallout continues to hurt industry

The number of construction disputes in the High Court has increased in the last year, as contractors struggle with tougher trading conditions, according to research.

The UK’s specialist Technology & Construction Court (TCC) heard 397 construction related disputes in the year ending 30 June, the third consecutive annual rise.

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Accuracy, the advisory firm which carried out the research, said the insolvency of Carillion in January 2018 has made owners and developers more prudent and proactive in their approach to contract management and dispute resolution with contractors.

This has driven a rise in claims throughout the supply chain between owners, contractors and suppliers, with each hoping to recover more cash.

Concerns have been raised in recent months over a number of major contractor groups reporting weak results, and another major outsourcer, Interserve, was taken over by its lenders after a pre pack administration in March. 

These worries over the sector’s financial strength are making developers more likely to pursue a dispute into litigation, said Accuracy.

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Hervé de Trogoff, a partner at the firm, said: “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. That’s driving a long-term rise in disputes reaching litigation.”

“Greater contractual and financial stress throughout the supply chain or the threat of tighter profit margins often leads to disputes and less amicable early settlements.”