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Resolving Construction Disputes

Disputes among businesses in the construction industry and sub-contractor sectors are increasing each year. According to the National Construction Contracts and Law Survey:-

‘About 30% of firms have been involved in at least one dispute in the previous 12 months’

Projects are usually complex and can be fraught with difficulties. Inevitably, disputes frequently arise. These include disputes over quality of work, payments and contracts.

In addition to considerable costs, a dispute can be extremely time-consuming, harmful to the contractor’s reputation, and damaging to a contractor’s relationship with their client.

As the industry reveals a significant increase in construction disputes, there is enormous interest in how disputes can be settled quickly, inexpensively, and with minimum disruption.

Why are Disputes and so Common in the Construction Sector ?

There are a number of reasons why disputes might occur. Among these are:

• Uncertainty. Not every detail of a project can be planned before work begins. This often leads to a challenge of either party’s work.

• Contractual Problems. It is not uncommon to find parties’ differing perceptions arising from unclear contractual provisions or amendments to the contract.

• Behaviour. Once a problem arises, a party may deny responsibility or seek to gain as much as they can from the other.

It is estimated that 70% of disputes occur during the construction process, the remainder following completion, and that around 20% of disputes result in work being stopped or suspended.

What are the Main Causes of Disputes ?

Key causes of disputes in construction contracts include the following :

  • Conra charges
  • Defects
  • Lare or non-payment of invoices
  • Negligence allegations 
  • Delays in completion of works
  • Recovering of retentions
  • Termination of contracts 
  • Liquidated damages

How can Disputes be Resolved ?

There are a number of options for dealing with disputes as they arrive. Which option, or combination of options, is appropriate depends very much on the nature of the dispute, what your priorities are and the type of relationship you might want to have with the other party once the dispute is over.

The threat of Legal Action

In most cases a well-informed and targeted solicitors letter, backed up with strong evidence and the threat of legal action is sufficient to resolve a dispute.

The key is for the letter to demonstrate credibility and authority and to cause the recipient (and their advisers) to believe that these people know what they’re talking about and they mean business.


Many construction disputes are resolved by negotiation. Negotiations may take place alongside litigation, arbitration, adjudication or any form of alternative dispute resolution (ADR), or before such proceedings have been instigated.

Settlement Meetings

Settlement meetings allow the parties to get together in a more informal setting and can be very effective at resolving differences at any stage of the dispute.

Statutory Adjudication

All parties to a construction contract have a statutory right to adjudication, whether set out in the contract or not.

This is a quick and relatively inexpensive method of resolving disputes which leads to a binding and immediately enforceable decision.

Adjudication can be commenced at any time, even while the project is proceeding. Decisions are usually arrived at within 28 days.

Court Action

Litigation is a powerful legal mechanism for resolving differences. It allows each party to present a thoroughly detailed and researched case decided upon by the courts. Often a last resort because of the inherent cost consequences and time-consuming nature of court process.


Parties deciding to use Arbitration will have a neutral third party to help resolve the matter. While it can produce a legally binding decision, Arbitration can be considerably more costly than other methods, perhaps even as high as legal proceedings. Arbitration may also require use of a technical expert.


No two business disputes are the same. What is the best solution for you will depend on the specifics of the matter. We advise on the most appropriate and effective way to address any dispute or claim against you.

How we can help you

Please get in touch with us to discuss any construction related disputes.  We'll be happy to speak on the phone about your situatioin free of charge and carry out a free initial case review.  

Please call us on 0800 1777 522 free of charge to discuss how we might be able to help you.

Call us for free on 0800 1777 522

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