Construction disputes are not uncommon, and many companies waste time, money, and resources in litigation annually because of such disputes. 

Based on a 2020 report by the international research firm HKA, an estimated 48.6 billion are lost by construction companies globally due to disputes. Experts at Arcadis suggested these figures somewhat decreased in 2022, but overall costs due to disputes remained high in the construction industry.

Disputes can create a negative financial impact on construction companies. So, what are the ways to avoid construction disputes from happening? Well, it is wise to understand the several types of construction disputes and why they occur to mitigate such problems. 

Issue of Miscommunication in Construction

Miscommunication is a common cause of disagreements and disputes in the construction industry. Conflict over budgets, schedules, and other crucial details of a construction project occurs when suppliers, general contractors, subcontractors, and owners do not have strong communication or fail to understand the terms of the agreement.  

When a construction project does not meet the expectations of the client or when the project estimate does not anticipate delays and costs, it may lead to disputes. Frequently, minor issues that could have been remedied turn disastrous due to poor or incomplete documentation. 

However, when either party communicates from time to time, disputes that can lead to costly lawsuits can be avoided. It is crucial for the parties involved to get prepared for sudden developments, and providing updates on the project through effective communication is the key. 

Avoiding mistakes that lead to disputes is crucial on the part of the construction company instead of blaming the client when a conflict occurs. Even if miscommunication or misinterpretation is coming from the client’s side, you have to take measures to avoid litigation. Lawsuits can be a waste of time and money, and put your construction company into disrepute. 

Types of Construction Disputes

There are different types of disputes that may happen in a construction project. Listed below are some of the common construction disputes. 

Trade Disputes

Certain disputes happen as a result of accidental damage during trade work. Welders, electricians, and trade workers can damage materials or equipment in the course of the work. 

If this happens, repair or replacement may be the solution. But, sometimes, it is challenging to figure out what or who caused the damage, especially if there are other subcontractors involved. 

Therefore, construction companies should use construction management software to document the progress and review such records on the construction site. Keeping accurate and timely reports helps determine the specifics of any accidental damage that may occur. Moreover, it protects construction companies from lawsuits. 

Site Conditions

Of course, the owner commissioning the project has the accountability for site conditions. But the contractor should check the site and pinpoint issues that can derail or cause changes in the project. 

It is a requirement for the contractor to keep complete records of site inspections to avoid construction disputes. If disagreements occur, the contractor can possess evidence to protect him from legal action. 

The contractor should have a checklist to guide him during site inspections. It is crucial to use a daily reporting app to keep photos and videos of site conditions. The stakeholders and workers should refer to these records to maintain safety at the construction site. 

Misunderstanding Regarding the Scope of Work

Communication breakdown can lead parties to misinterpret the scope of the project. The contractor and the client may have different expectations of the project when there is a communication gap. 

Modern technology is the key to avoiding problems in communication in construction. Contractors can gather and share information in real-time and in standardized ways to ensure that stakeholders in the project are updated. 

Construction companies can use a project management solution to document all stages of the work in detail and distribute such data to parties involved in the project. It is easier to track the progress of the work if stakeholders have access to such information in real time. They can catch potential issues and respond to them quickly. 

Changes to the Project Scope

Changes to the original project scope happen because most construction work evolves as they progress. For instance, modifications to the original project design may occur due to quality issues. Inclement weather is also a reason that results in extended timelines. 

When changes to the original project scope arise, contractors have to provide a clear explanation for such adjustments. Disputes happen because of wrong information or lack of explanation as to the reason why the original project scope has to change. 

Endnote

Disputes can occur in a construction project, and construction companies have to implement measures to avoid such things from happening. Effective communication is crucial to ensure that stakeholders in the project are on the same page. Every vital information concerning the project must be shared and explained clearly. Plus, there should be proper documentation to monitor the progress of the project.