Partner Jessica Tresham and Associate Hannah Gardiner at Womble Bond Dickinson offer a guide to being prepared for construction disputes.
Future-proofing and protecting your construction business from both anticipated and unexpected events is more important than ever in the current climate. A vital step in this process is safeguarding against potential disputes and seeking advice early before they escalate.
The number-one rule we advise all our clients in the construction industry to follow is accurate record-keeping. Accurate records often make the difference in whether an issue escalates into a full dispute, and, if it does, whether a case is won or lost, regardless of what actually happened on the ground. So what may seem like a tedious task at the outset will pay dividends should you find yourself facing a dispute.
Agree on record-keeping up front
Misunderstanding and miscommunication are common roots of any problem, and especially in disputes. It is crucial to agree on the records to be kept when negotiating your contract – and remember that requirements differ depending upon the form of contract. Not only should you aim to set out the full extent of records required but also how these will be created and stored, whether that’s in paper or electronic form, the frequency of updates and the duration for which record-keeping will happen from pre-build to post-handover. Once agreed, actively follow those contractual requirements and ensure that all project team members are aware of their record-keeping obligations.
Establish a structure and stick to it
An issue can quickly escalate into a dispute (and, potentially, an adjudication with its established short timescales), so, when it does, gathering evidence from records within a short timeframe is no mean feat. Establish a structure from the beginning to ensure ease of searchability and filtering to find what is relevant and useful in an efficient and timely manner.
Bear in mind that every file and piece of data may need to live for many years to come, so choose a document management software system that will best accommodate future circumstances, such as office relocations, personnel turnover and governmental policies on the handling and storage of information. Ensure that your record-keeping complies with the General Data Protection Regulation (GDPR) framework.
Keep your discipline
Treat every record as if it were associated with a developing dispute, so you can spot gaps and vulnerabilities in the information from a perspective of heightened awareness. Arrange regular training sessions to refresh skills and improve the way in which your team logs the records, and run spot checks with mock dispute scenarios to ascertain that the system is working effectively.
Regardless of whether the evidence may be used to defend the company as part of a claim or simply for project reports, make sure each record is clear.
A photograph taken on a phone or digital camera will carry a time stamp and a global positioning system (GPS) meta tag, but it would be sensible to also document the time and location for easy searching and retrieval.
For a site diary or data of a qualitative nature, lose the jargon, so that there is no room for misinterpretation. If materials are delayed by customs hold-ups at the port, ensure that this is accurately recorded in the log.
Share records with all agreed parties in real time, and make sure that you ask recipients to confirm both receipt of the records and that they are satisfactory to them.
In summary, reaching a swift resolution for claims can lie in meticulously produced records. Reduce risk by starting with basic contract management that outlines the scope of records, then implement a system based on clarity, with buy-in from the whole team.