Design and consultancy firm Arcadis releases its 2018 Global Construction Disputes Report and asked, “Does the construction industry learn from its mistakes?” The report, later summarized by Construction Dive, found that construction and contract disputes are getting longer and more complex across the globe, costing upwards of $40M annually, and taking close to 15 months to resolve. Contract Dispute Statistics Arcadis defined disputes as a, “situation where two parties typically differ in the assertion of a contractual right.” These disputes are getting more expensive and lengthy:
- The average value of a North American dispute dropped to $19M, from $25M and $21M in 2015 and 2016, respectively.
- However, the global average skyrocketed from $32.5M in 2016 to $43.4M in 2017.
- The average length of a North American dispute increased to 17.7 months from 15.6 months in 2016. The global average is only 14.8 months.
- Poor contract administration, including contract errors and omissions were the top dispute cause.
- The failure to complete claims is the second dispute cause, along with poorly drafted or unsubstantiated claims.
- The failure of the owner, contractor, or subcontractor to understand or comply with contractual obligations is the third top dispute cause.