BY JONATHAN MAHONY Partner and Head of Dispute Resolution Business Disputes
Disastrous Delays
The construction industry, more than most, requires a high level of co-ordination between a number of different trades, professions and suppliers in order to successfully deliver pro- jects. However, collaboration disputes frequently arise which can transform even the simplest construction project into a costly nightmare. In the spirit of Halloween, we explore some of these construction nightmares and consider how expert legal intervention can help.
Delays are among the most dreaded issues in construction projects, often leading to significant financial losses and strained relationships between stakeholders. Whether caused by unforeseen circumstances like severe weather or supply chain disruptions, or by more predictable issues such as mismanagement or insufficient planning, delays can derail a project and lead to a cascade of legal disputes. The Crossrail project, also known as the Elizabeth Line, is one of the largest infrastructure projects which has taken place in the UK. Crossrail was initially scheduled for completion in 2018. However, the project was beset by delays, attributed to complex engineering challenges and difficulties in coordinating the various contractors involved. The completion date was pushed back several years and it only opened in May 2022. The delays not only led to significant cost over - runs but also sparked disputes over liability and compensation between the various stakeholders, including contractors, suppliers, and government agencies. Properly drafted construction contracts and associated documents allow parties to properly manage the risk of delays by specifying how they will be handled, including who is responsible for the additional costs incurred. When disputes arise, lawyers can represent their clients in negotiations or court proceedings to determine liability and secure compensation. In large, complex projects like Crossrail, where multiple parties are involved, lawyers also play a key role in coordinating and managing the various legal claims that may arise.
Latent Defects and the Limitation Axe
Latent defects are a particular type of construction nightmare that can remain hidden for years, only to surface long after a project is completed. These defects, often structural or related to building systems, can undermine the safety and integrity of a building, leading to costly repairs and significant and expensive legal disputes. For newly constructed homes, many latent defects are covered by new building warranties (such as the NHBC Buildmark warranty) for defined periods of time after construction. However, if a claim is made after the expiry of the relevant warranty period, the provider is not required to indemnify the innocent property owner. Similarly, there are various statutory time limits (or limitation periods) for commencing court proceedings relating to defective works. If missed, these can prevent an innocent party from recovering the cost of rectifying defects and other losses from the party in breach. Where latent defects arise, to minimise the risk of your claim being “axed” at an early stage it is important to consult lawyers at the outset to ensure that the relevant time limits for bringing a claim against warranty providers and/or issuing court proceedings are understood and not missed.
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