Resolving Building Disputes: What You Need to Know

You may be running a business in the construction industry or be party to a contract with a building company. Construction can be complicated, and as a result, a building dispute can arise. In this scenario, it is essential to resolve construction disputes as soon as possible, as disputes can significantly disrupt the building project timeline. This article will explain what you need to know about your options for resolving building disputes.

What is a Building Dispute? 

A building or construction dispute occurs when a disagreement takes place between people or companies over building or construction projects. For example, you could, as a business owner, fall into a building dispute with a construction company building an office for you. Alternatively, you could carry out a construction project and have a dispute with another contractor working on the building site. 

The lengthy and, at times, complex nature of building projects means that you may be at risk of building disputes where there is limited communication between parties. Additionally, uncertain and contractual issues can increase the likelihood of a building project dispute. Construction disputes can involve issues about:

• design;
• engineering defects;
• defective work;
• payment issues
• increase in costs; and 
• delays.

Delays are the most common claims arising from a construction dispute. These affect many aspects of a building and project, such as the costs and timelines. 

How is Alternative Dispute Resolution Relevant? 

If you work in the construction industry or are part of a building project, you will usually have a contract with the parties involved. This construction contract may have a clause outlining how any disputes will be resolved. If so, you must carry these procedures out as part of your contractual obligations should a building dispute arise. These could include alternative dispute resolution (ADR) procedures, such as:

• mediation;
• arbitration; and 
• adjudication.

This provides both you and the other party a chance to resolve the issue and, if relevant, continue the building project without legal intervention. 

In addition, the Construction Act 1996 offers a legal right for a party in a dispute to ask an arbitrator to resolve the dispute at any point in the disagreement process. The arbitrator’s decision is binding but can be changed later by court litigation or arbitration. 

When Should I Consider Litigation?

Unfortunately, ADR procedures for construction issues do not always work, and it may sometimes be necessary to resort to litigation. You may consider taking your dispute to the courts if, for example, you would like to enforce a decision reached during ADR. Court proceedings tend to be lengthy and more expensive than an ADR method to resolve building disputes. If you are the claimant, or the individual starting proceedings against the other party (defendant), the proceedings may involve:

• you completing a claim form that sets out the issues and what remedy you wish for;
• the defendant responding with an admission of liability, of partial liability, or denying that are liable and serving a defence;
• your response to any counterclaim;
• the court giving directions to the parties, such as disclosure of evidence instructions;
• a trial allowing parties to present their case and make an enforceable decision; and
• the judge telling parties what the remedy is and possibly also making an order for action.

The Pre-Action Protocol for Construction and Engineering Disputes, which must be resolved before the court, details the specific timelines and procedures for the above. 

What is the Technology and Construction Court?

The Technology and Construction Court is a specialist court that hears disputes about technology and construction issues. When a dispute is held in this court, those involved must follow the Civil Procedure Rules (CPR) and the Technology and Construction Court Practice Directions. Some of the claims the court can hear which may be relevant to your dispute are:

• building or construction disputes;
• engineering disputes;
• claims about the quality of goods;
• claims about the quality of the work done;
• claims about the quality of material supplies or services given;
• application to appeal a decision for an engineering or a construction dispute; and;
• appealing an arbitral decision for a construction or engineering dispute. 

How to Manage a Business Dispute

This fact sheet outlines how your business can manage a dispute.

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Key Takeaways

Engaging your business with the construction industry can be an exciting period, but you should remember that building projects have varying degrees of complexity and timeliness. As a result, there may be times when you find yourself in a building dispute over a wide range of areas, such as defective work or payment issues. If a building dispute arises, you should know:

• whether you are contractually required to use ADR;
• how the court process works;
• what matters the Technology and Construction Court can hear. 

If you need help understanding legal advice for building disputes in the UK, LegalVision’s experienced disputes and litigation solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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