Where and When do Contract Disputes Usually Happen

It can be easy to make assumptions like ‘the bigger the project, the higher chance of dispute’ in the construction industry. However, the reality is that disputes can arise on any size, type, or value project – making protection essential no matter what scheme you’re working on.

The risk of disputes is an inevitable part of a complex industry like construction, and indeed, there has been an upward trend in adjudication referrals since the introduction of statutory adjudication in 1998. A report from King’s College London – 2023 Construction Adjudication in the United Kingdom: Tracing Trends and Guiding Reform – reveals that between May 2022 and April 2023, the number of referrals was the second highest to date at 2,078 – only slightly below the 2,171 high recorded during the first Covid lockdowns.

With almost three quarters of adjudication claims being valued between £125,000 and £500,000 (45%) or between £500,000 and £1 million (25%), this is costly business. However, lots of these disputes could be avoidable when examining the reasons behind them. The King’s College London report details the top three recorded reasons for disputes between May 2022 and April 2023 as:

There are all navigable with effective contract management. While some disagreements will become full disputes, having the right tools in place can give project teams the chance to address issues before they escalate.

So, how does Sypro Contract Manager help protect and minimise the risk of disputes in these areas?

 

Understanding the contract

The system creates clarity on where actions sit in terms of responsibilities across project teams and expectations on when things should happen. Sypro Contract Manager pushes project teams to follow the due diligence of the contract, with automated functions and reminders helping to avoid any potential missed deadlines or skipped stages.

Features like the ‘conversations’ tabs within the platform push better collaboration, allowing project teams to discuss issues on a case-by-case basis and keeping all communication in-platform with timestamps for audit trails.

Being online and transparent is key, with each conversation aligned per event in the system, tying together with compliance as contracts state that all communications need to be accessible and recordable. Not only does this enhance every user’s understanding on processes, progress, and responsibilities, but also helps to protect against personnel changes too, ensuring the knowledge is in the system and project teams are not reliant on the prior knowledge in an individual’s head.

 

Following the contract

The system creates clarity on where actions sit in terms of responsibilities across project teams and expectations on when things should happen – as well as making sure actions cannot be missed before proceeding to next stages.

The analogy here would be a cooking recipe. Using Sypro Contract Manager would remind you of every step, making sure that you don’t do something before adding a critical ingredient for example – and it will do this regardless of if you’ve cooked that recipe before, working to alleviate natural human error that can sometimes occur.

Audit trails also allow clients to keep an eye on progress and performance, with the online platform providing transparency and power to see where things are working – or where they may not be – to rectify problems before it’s too late and a dispute arises.

 

Navigating changes of scope

Client briefs need to be well drafted from the off, which is one of the reasons that elements like early contractor involvement are so key to build projects across the industry. However, even when briefs are clear and well-drafted, changes in client scope can happen at any time and poses a common challenge in the sector.

It’s here that quality contract management is key to protection. The right approach makes sure that all the necessary steps are taken regarding a change in scope, and are recorded and communicated in the correct manner. Without this transparency, the risk for disputes greatly increases, creating chance for things like payments to cause disagreement.

Here, the guidance and centralised system Sypro Contract Manager offers comes into its own. And its integration with Viewpoint for Projects also enhances a seamless solution that ensures projects are accurate and current. This integration makes sure that all the approved project information is available in one central intuitive tool – creating consistency across the board.

If the system is followed, it doesn’t leave negotiation until the end of the job, which particularly important where scopes may change. It needs the agreement as work proceeds, which is also better for budget control. Especially under NEC contracts, this allows the client to know – and approve – what they are spending, when they are spending it, avoiding nasty surprises later on that may otherwise create reason for dispute.

 

Give yourself the chance

Ultimately, tools like Sypro Contract Manager are there to assist and protect. The nature of construction means that conflicts of agreement can lead to dispute – but many that arise from poor management can be avoided. With the right tools in place to navigate effective contract management, teams stand a higher chance of smoother project execution and rectifying issues before they become full-blown disputes.

Do you want to enhance your contract management and help protect against unnecessary disputes? Get in touch with Laura or Josh to set up a demo or introductory call today.

Top Tips To Avoid Disputes In Project Management
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Top Tips To Avoid Disputes In Project Management