Civil Engineering Reference
In-Depth Information
client/consultant and any permutation of those that you care to imag-
ine - even better,
all
of them in one dispute: final account, extensions in
time, loss and expense, professional negligence, performance, defects
and so on, and so on. There is no limit to the possibilities. All because
the construction industry loves a fight and hates to change.
Though endemic, disputes are bad for the industry. The CIF
2
survey
of the Irish construction industry carried out in 2006 suggests that 2% of
turnover is spent on managing disputes. In a 3% margin industry, that
must be bad. Even if the Irish experience is more extreme than that in
the UK, the amount of lost wealth caused by disputes is huge.
Disputes not only waste money, and therefore drain profits. They sour
and even destroy relationships. They can be stressful, and physically and
psychologically draining. They take attention and energy away from
the project, and the focus is no longer on successful completion but on
the impending fight. Disputes limit and often distort communication,
raise suspicion and threaten financial instability. They make other prob-
lems more difficult to resolve. Only negatives result from unresolved
disputes.
It is apparent that the reasons for disputes being so much a part of
construction life fall into four categories:
Contract (Is there one? Is it enforceable? Where are the 'get-outs'?)
Finance (low margin, claim culture, credit-based)
Culture (adversarial, fragmented, incurably optimistic)
External factors (consultants, weather, legislation)
1.1
Contract
1.1.1
The 'no contract' scenario
It is amazing to me how many disputes I mediate where no contract
exists at all. It is usually the parties' intention to draw up a contract,
but whether it be because the parties are optimistic that there will be
no problem, or because they feel they have a good enough relationship
to be able to weather any difficulties, is not clear. One thing that does
appear to be common in these disputes, though, is the eternal optimism
of the construction industry that this job will be the perfect one: the one
that has no delays, is designed to work perfectly and programmed to
2
Construction Industry Federation, Dublin.
3
