With nearly three quarters of respondents to a recent survey having encountered disputes or claims specific to Covid-19, it is becoming more common for contracts to add risks associated with Brexit and Covid to the list of outcomes for which the client or developer is not responsible.
With such disputes on the rise, I am noticing a shift away from automatic litigation in the wake of the pandemic. It seems firms are waking up to the benefits of dispute resolution.
There is no doubt that this spirit of co-operation with a collaborative approach has been helpful in solving a whole range of issues, such as Covid disputes over stretched timelines, climate-driven impacts such as fire, flood and hurricanes and supply chain constraints such as labour and materials shortages. Conversely, the adversarial system of litigation nurtures distrust, distortion and animosity. Teams need to be collaborative, be fair with each other and share risks reasonably.
Looking abroad, in the US, for instance, where there was no particularly clear regulatory regime around site closures, for example, the sector did not respond as litigiously as one might anticipate. In one instance, where delays and materials shortages were taking their toll, the team got round the table and agreed that the contractor could have several more weeks, but not more money. Given the uniqueness of the situation created by the pandemic, this reaction has not been uncommon, and we have seen similar scenarios play out across the States and here in the UK.
That said, various cultures around the world continue to differ when it comes to their approach to disputes. In the Middle East, Covid exacerbated an already quite litigious culture, as it did in South America.
However, in the UK, as we see increased use of modern methods of construction with the impact of modular building, there may well be less friction that requires dispute resolution – at least in the area of quality control and project planning.
Richard Steer is chairman of Gleeds Worldwide