Arcadis published its Global Construction Disputes Report 2021 comparing the length, value, and ways of solving construction disputes in particular regions of Europe, Asia and North America.
“In our experience, the most disputed construction issues concern infrastructure projects in the Czech Republic. This is because these projects financed by public funds generate the highest investment volume and the largest number of comprehensive contracts. The most common causes of construction disputes were differing site conditions influenced by the condition of the underground and other unforeseen factors or owner-directed changes caused by the length of the project and possible changes during their implementation. Requirements of third parties (such as network administrators, lockout) or force majeure (e.g. coronavirus pandemic) play an important role too,“ says Zdeněk Trejbal, team leader of Contract Solutions of Arcadis consultancy company.
The average length of disputes that Arcadis´ Contract Solutions team was solving was more than two years, while claims processing took approximately one year. The average value of disputes, which Arcadis was settling, ranged between CZK 100 and 500 million. The most common methods of dispute settlement were party-to-party negotiation, expert determination and, in extreme cases, a trial. The most common form of an early settlement of disputes resolved in our region then was a settlement prior to proceedings or settlement following proceedings to trial.
During the year 2020 Arcadis encountered disputes and claims specifically caused by the impact of COVID-19, as there were numerous delays and disruptions on the construction projects. In the Czech Republic, this issue was addressed by the customer methodology, which addressed time and financial determination.
“Proper contract administration or accurate contract documents would have the greatest impact on preventing disputes in which we participate. The most important factors in mitigating the disputes we encountered include the contract mandated early resolution forums, mutual willingness to compromise, or accurate and timely schedules and reviews by project staff or third parties,” says Zdeněk Trejbal from Arcadis.
