Build Magazine September 2015

Build Magazine 18 hose involved in the construction and building industry have possibly more than their fair share of disputes. The nature of the industry, and uncertain- ties in many building contracts where unforeseen events arise, make disputes as to what may or may not be included in any terms agreed for payment or for delays in projects more common than in many other contractual relationships. There are many instances when it is necessary to establish who is at fault and/or how and when a right to terminate and seek damages may arise. It is also far from uncommon for more minor and domestic building contracts to be sparse on detail. Construction disputes now form a separate branch of law due to the complexity of many large scale commercial construction contracts which involve multiple subcontractors and specific industry stand- ard contracts which usually set out the obligations of the parties in great detail, and govern how any disputes that arise are to be dealt with. What steps can be taken to avoid disputes arising, or to deal with any disputes cost effectively, will depend largely on the sector in which you operate. However, there remains no substitute for seeking advice at the outset of any relationship and en- suring that agreed terms are reduced to writing so obligations, expectations and timescales, as well as payment terms, are clear. The danger of clients, business partners or customers not paying because of insol- vency and/or sometimes spurious disputes being raised in attempts to avoid payment are also prevalent. It is important to regu- larly have checks on solvency and possibly insurance (where this is not a professional requirement). Seeking guarantees where doubts as to solvency exist is also a consid- eration at the outset of any business relationship. Once the relationship is on foot however, there are further other strategies and options to minimise the risk of a dispute escalating that can be considered. If there are contractual terms that specify how a dispute should be dealt with, ensure these are followed so that there is no satellite issue as to whether the correct procedure has been followed; • Try to avoid “knee jerk” reactions such as locking or ordering someone off site/with- drawing labour etc., as this can be costly if not considered and handled correctly. It is not always as clear cut that there is a breach of agreement sufficient to entitle such actions. Many disputes arise as a re- sult of a misunderstanding as to the rights of the parties in this regard. • Seek advice early to ensure that you are dealing with the dispute from the correct legal standpoint and asserting the correct position and/or know what your rights and options are. This may avoid assumptions as to entitlements/rights that do not exist in law. Backtracking or changing your stance later can mean the other side has become less amenable to reaching a resolution; • Try to avoid inflammatory language when articulating your position or responding to any dispute intimated. Always bear in mind that communications sent by letter e-mail, text or otherwise are documents that have to be disclosed if court action is necessary – Avoiding Company Disputes Within Construction and Building Disputes with suppliers, clients, customers or business partners can be costly, time consuming and stressful. A dispute can also have adverse impacts on your business cash flow if payments are withheld, and can cause reputational or other damage to the business if details are made public. T