Civil Engineering Reference
In-Depth Information
free from claims. 'Fixed price lump sum' was supposed to be just that,
but how many of us smiled when the Football Association used that
term regarding the delays on the Wembley contract? 'Fixed price . . . we
won't be paying anything more,' they said. 'Oh yeah!' was the universal
reaction; that's not how it works.
There is not an area of construction activity that is protected from this
dispute-orientated environment.
Case study
In 2005 there was a report on a dispute involving a couple who
had an extension built to their house - quite a large one, and built
by the most reputable builder in the area. He was paid up to the
last £5,000, but that last amount was withheld because the own-
ers were dissatisfied with some, quite minor, work. The contractor
pulled off site, refusing to complete the work until the monies due
to him were paid. No money came, the contractor instructed solic-
itors and, some time later, after the case was heard and appealed,
the building owners were faced with having to sell their house to
pay the £250,000 total legal costs. The appeal judge was critical of
the lawyers for allowing such cost to accumulate, but - to a greater
or lesser extent - this is not an uncommon situation.
I recently mediated in the IDRC building
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and their reception was
filled with a recent delivery of around 30 bankers' boxes of documents -
one side's papers for an arbitration that was destined to last several
months. Obviously a big case (well, I hope so!). Good for the IDRC who
rented out the rooms and facilities. Good for the arbitrators (I think there
were three). Good for the lawyers. Bad for the parties and bad for the
reputation of all involved. At the end of the day the excessive time spent
in resolving a dispute, and the consequential cost, is not something to
brag about. Many small (that is, up to £250,000) disputes that I mediate
are in the awful situation of the costs exceeding the claim, so the dispute
is no longer about settling a claim but about who pays the costs.
Not only does the construction industry have no regard to the size of
the project for breeding disputes, but its disputes also affect the whole
spectrum of its activities. Client/contractor, contractor/sub-contractor,
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International Dispute Resolution Centre, 70 Fleet Street, London.
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