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Feature
RESOLVING
CONSTRUCTION
DISPUTES
MID-PROJECT
Feature
LITIGATION IS EXPENSIVE. ALTERNATIVE DISPUTE
RESOLUTION PROCESSES CAN HELP CONSTRUCTION
PROJECTS STAY ON TRACK AND AVOID UNNECESSARY
COSTS BUILDING UP UNTIL COMPLETION
HISTORICALLY, THERE has been a strong
tendency in the construction industry to
take the disputes that emerge over the course
of a major project, file them away "like a
squirrel storing up nuts for the winter," and
settle them all at the project's completion,
says lawyer Bruce Reynolds. But the typical
mid-sized project takes two to two-and-a-
half years, and a major infrastructure project
will take five to seven, he says. In the interim,
the general contractor and subcontractors
will be under "extreme financial pressure."
With high interest rates adding to the stress,
the costs accumulate significantly.
"As does the imagination deployed to the
calculation of damages when folks have a
period of years to consider just how large
their claims should be," says Reynolds,
co-managing partner of Singleton Urquhart
Reynolds Vogel LLP and co-chair of the
firm's international construction projects
group. "By the time you get to the end of
a construction project, if you haven't made
a serious effort to resolve disputes as they
emerge, you tend to have a rather mammoth,
multifaceted dispute awaiting the parties,
their lawyers, and their consultants when
the project is essentially completed."
But for parties seeking the urgent adjudi-
cation of a dispute, as is oen the case on a
large construction or infrastructure project,
the courts are not currently well suited
to the task, says Andrew Parley, a partner
at Lenczner Slaght LLP whose practice
primarily involves litigation and dispute
resolution in construction, infrastructure,
and real estate. He says that the courts can
offer a half-day on an urgent basis, but more
time is required to digest these complex
issues. For more than one day in front of a
judge, parties are booking 12 to 18 months
into the future.
"Whereas there was probably a time
where you can get in front of a judge and get
some quick decisions on an urgent matter
in real time, that's become more and more
difficult," he says. "e parties to construc-
tion projects are not very frequently turning
to the courts and are far more oen relying
on alternative dispute resolution or private
arbitration to deal with the disputes that
arise on their projects."
ese delays in resolving business
disputes are increasingly driving arbitration
