Construction and Building Disputes

Arbitration can assist contractors, property developers, building owners and suppliers in addressing the disputes that emerge in their line of business. Disagreements on the terms of the contract can hamper construction projects, at times even before the work begins (see Planning and Development disputes). This is likely when one of the project stakeholders pushes to have the contract executed on their own terms. For instance, a property developer may press to put all the liability on the contractor should anything go wrong, instead of distributing the risk. Building and land owners may press for the project to begin, despite the blueprint designs being incomplete. This can result in building defects, delays or cost overruns as the work advances. And as the project progresses, more disputes arise if any party makes further variations or amendments to the contract.

Conflicts also occur during construction projects when one of the parties involved breach the “duty of care” that comes with every contract. The “duty of care” prescribes the range of responsibilities that should be accomplished whenever two or more entities enter into a contract. For instance, a contractor must deliver a professional quality of work to the building owner. If the building work is defective, the owner can file a complaint on the contractor for professional negligence. Likewise, a contractor can also be liable if there are building code violations in the work, or if they fail to provide a safe workplace for labourers.

Aside from these situations, disputes can emerge between contractors and suppliers of building materials. Payment delays are a common cause of conflict between contractors and suppliers, especially if the latter had been timely in the delivery of the materials. Contractors may find it difficult to pay the suppliers when the payment from the building owner is delayed. An alternative source of conflict between contractors and suppliers is when the latter discloses product information. For example, a supplier may have knowledge of a cheaper alternative in the market, but is hesitant to share this information with the contractors out of fear that it would hurt his product sales. When the contractor or developer finds out, they may file a complaint against the supplier; and so the dispute begins.

Lastly, construction and building disputes can occur between property developers, contractors and the general public. The conflict typically stems from inconvenience or noise to the surrounding public, and may involve escalations to the local council. In such cases, construction and building work may already be underway therefore all parties will need to have an open discussion about how they can accommodate one another. Property developers may agree to a late start time to avoid disruptive noise in the early hours and in return, surrounding residents may agree to allow a weekend day for construction to carry on.

When these types of disputes get out of hand, SHAW Arbitration can help find an effective resolution so the work can move forward. The disputes might concern any of the following:

  • Property development
  • Residential construction
  • Commercial construction
  • Contract and breaches of contract and variations
  • Construction and engineering
  • Surveying
  • Negligence
  • Owner-contractor dispute
  • Payment issues
  • Building defects and delays
  • Material defects
  • Architectural issues
  • Electrical and Regulation issues
  • Insurance
  • Personal injury
  • Property damage
  • Public inconvenience, noise and nuisance

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Alison Shaw of SHAW Mediation successfully mediated a contract and building works dispute for one of our clients.  I found the mediation to be useful in requiring the disputing parties to be in one place at one time, allowing each side to express their position (and even vent their frustrations) whilst being kept in line by an experienced mediator. It was by no means certain to me beforehand that the matter would resolve at the mediation, but Alison’s guidance and systematic approach facilitated a commercial settlement.  I am confident the parties would not have reached a better outcome if they had gone to court.  I rate highly the mediation process used by Alison Shaw in this matter, and would recommend her to other clients considering mediation in the future.

Matthew Hawke

Cowell Clarke