Mitigating Risk: Proactive Measures to Prevent Construction Disputes

In our previous article, Understanding Common Contract Disputes in Construction Projects, we explored the various types of disputes that commonly arise in construction projects and how they can often be prevented. A key takeaway from that article was the importance of setting up and following the contract correctly.

In this article, we delve into specific proactive measures you can take to prevent disputes or ensure they are managed as efficiently as possible when they occur.

1. Contract Management: The Foundation of Dispute Prevention

Effective contract management is a comprehensive process that begins at the beginning of a project and continues through to completion. A well-drafted contract is essential but must also be actively managed throughout the project lifecycle.

Key elements to consider when setting up the contract:

• Scope of the works involved
• Timeframe for completion, including potential extensions
• Variations (changes to scope or design)
• Payment terms and conditions
• Indemnities and limitations on indemnity
• Liquidated damages for delay

Once the contract is in place, it’s crucial that all contractual provisions are adhered to, and this includes:

• Timely notification of delays and adherence to contractual timeframes for extensions
• Properly instructing variations and agreement on costs
• Ensuring payments are made within the agreed timeframes

A common pitfall for contractors and project owners is forgetting to refer back to the contract once it is signed. Treat the contract as a living document that needs to be referenced regularly throughout the project.

2. Records Management: Documenting Events to Prevent Disputes

A key strategy for preventing disputes is diligent and accurate record-keeping. This can include everything from documenting significant events, such as health and safety breaches or accidents, to more minor, day-to-day details like tracking daywork and timesheets.

The importance of contemporaneous records:

• Good, timely documentation can resolve disputes before they escalate.
• Photographic evidence is especially useful in documenting progress. However, ensure that photographs are taken consistently and cover the entirety of the work, not just the most advanced areas.
• Keep copies of relevant correspondence and store them in a separate file to track disputes and have access to necessary documents when needed.

When incidents occur on-site, aim to obtain written statements from witnesses shortly after the event. If you have a verbal conversation regarding an issue, follow up with an email confirming what was discussed.

Remember: there is no substitute for good contemporaneous records.

3. Communication: A Key Tool in Dispute Prevention

Proactive communication is another essential measure in preventing construction disputes. Our advice is to communicate early, communicate often, and communicate fully.

• Communicate early: Don’t wait for issues to escalate. Address concerns as soon as they arise to avoid misunderstandings or forgotten details.
• Communicate often: Regular updates and open communication lines on both sides can prevent minor issues from turning into major disputes.
• Communicate fully: Avoid the temptation to adopt a minimalist approach to communication. Be transparent, open, and honest about challenges and expectations. Transparency fosters a collaborative working environment, which can resolve issues before they develop into formal disputes.

Conclusion

Effectively managing construction projects to prevent disputes requires a proactive strategy. By focusing on three key principles, you can establish a strong foundation that ensures smoother project execution and significantly reduces the likelihood of conflicts arising.

To summarise:

1. Ensure the contract is set up correctly and followed meticulously.
2. Maintain detailed, accurate records throughout the project.
3. Communicate early, often, and with complete transparency.

By focusing on these proactive measures, you can significantly reduce the risk of disputes, ensuring projects run smoothly, on time, and within budget. These practices not only prevent problems but also create a more efficient and positive working environment, benefiting both the short-term progress and long-term success of your construction projects.

Get in touch

For more information on construction disputes and best practices or to discuss an ongoing construction issue, please get in touch with Andrew and our Construction Litigation team on 023 8063 9311 or email enquiries@warnergoodman.co.uk.