Construction: Pre-Empting A Dispute With Early Planning

The long-running dispute involving the $3.4 billion mega-hotel project in Baha Mar continues to be a reminder to the construction industry to mitigate the risks of disputes at every stage of projects.  The award-winning commercial litigation lawyers at ParrisWhittaker are experienced in advising and representing clients in construction disputes.

The Baha Mar dispute originally stemmed from allegations that an contractor resort failed to perform its duties properly, leading to the first developer to launch a $2.2 billion claim in 2018 for breach of contract and fraud. The construction company denies the claims (which included allegations of fraud) and a full trial has yet to be heard.

In one astonishing claim by a party in the dispute, an executive at the Chinese state-owned contractor (China Construction America), purportedly encouraged construction workers to conceal deficient construction work on the project.

Disputes

Construction disputes can seem inevitable when many parties are involved – such as in cases like the massive Baha Mar resort project. Yet they are not inevitable and with due diligence and specialist legal support throughout the project, the risks can be minimised. It’s not just the costs involved in bringing disputes to an end – it’s the inevitable delays caused to the projects themselves and potential reputational damage.

However, when disputes do arise they can be lengthy and costly – and if the parties can resolve the issues without court action, it is in all their best interests. Indeed, the courts expect the parties to try to use appropriate ways to try to bring the dispute to an end without going to court by way of alternative dispute resolution (ADR).

Even more preferable is working to pre-emp a dispute in the first place.

Pre-emption better than cure

At the outset, construction and building companies are cautioned to plan for and minimise the risk of disputes and potential legal action. Vital steps that ought to be implemented include:

• Ensure sufficient finances are in place to fund every stage of the project
• Agree clear, unambiguous terms against the background of defining and setting out reasonable expectations and goals (including budget and works schedule)
• Formally record any subsequent variations
• Carry out risk assessments to identify potential risks and their likely impact
• Ensure there is a risk management strategy to identify unexpected problems or events (a key element of effective project management)
• Dispute resolution – agree the procedures to resolve disputes by way of ADR – mediation, arbitration or adjudication
• Decide jurisdiction – should a dispute arise, where is the dispute to be litigated?

Bear in mind that where projects require the hiring of contractors, the risks increase further. The wisest way to reduce the risks of a dispute is to instruct specialist commercial solicitors from the outset who can protect your interests at each stage of the project.

How can we help?

We can help you in your risk management strategy and protect your legal interests at each point of your construction project. Our specialist lawyers work to help you avoid conflict arising in the first place. But where a dispute does arise, we work to support you in resolving the issues as early and effectively as possible – allowing the project to complete.

For expert advice, get in touch with the experienced commercial lawyers at ParrisWhittaker on info@parriswhittaker.com