Carlos-barraza-logo-50

Commercial Disputes in the Construction Industry: Common Issues and Solutions

Written by

Do you know that feeling, like you are head-deep inside a dramatic performance, when visiting a UK construction site? Someone seems to be on a never-ending payment quest, another is “busy” rounding up documents, and there is a palpable sense that something will combust any moment now. 

Why, though, do these factors appear to continue ad infinitum, and is anyone trying to work on fixing, I mean, truly fixing these concerns? Let’s take a look, with no hard hats necessary.

Commercial Disputes in the Construction Industry Common Issues and Solutions

Money: Still the Main Headache

However, others are grappling with securing payments, which adds extra pressure with the economy wobbling. Technological advancements have eased many aspects of life, but for payment collection, it’s still complicated. Turning off workflows brings about a new set of issues. 

Suppliers grow frantic, and retreating workers turn the project into a high-stakes Jenga game. These persistent payment issues often escalate into commercial disputes, requiring intervention from legal firms like Summit Law to resolve.

Quality: Always Under the Microscope

Payment is withheld due to unsatisfactory work. Cladding issues have no end. Everyone went on guard regarding wrong cladding because of Grenfell. No one skips the final check anymore, thanks to the Gateway rules in the Building Safety Act for high-rises.

Avoiding this hurdle will only pave the way for disastrous legal consequences.

Delays: The Classic

Almost any extension to set deadlines is treated with the addition of new regulations, turning them into perpetual standstills. British culture does not help the situation when weather-related delays, Building Control, or an endless “Building Control Control” loop are added into the mix.

Just One More Thing…

The incessant ticking of the clock is what no one wishes to encounter. It raises the question of whether they happen to have a client who cannot leave well enough alone and feels the need to overextend them with additional requests. Chances are, if a scope change is undocumented, it will turn into some sort of ninja patiently waiting to strike at the most opportune moment.

Contracts: The Good, the Bad, and the Ugly

Unsurprisingly, they require strong contracts. Contracts should be vaguer than specific simply because if you choose to be specific, you’re putting yourself at risk. 

Grenfell had a spurt of lawyers suffocating them with overly abundant “what if” scenarios, bound in dangerously crafted templates that lawyers design rather than focus on the intricate details that matter.

So, How Are Disputes Getting Sorted These Days?

Surprisingly, the construction industry in the UK does appear to be moderately proactive. There is no business logic in waiting for a challenge to occur, and with some clever tactics, they seem to manage problems quite well.

Adjudication: The Quick Whistle

Adjudication works more like the construction industry‘s rapid adjudicator, resolving issues to ensure normal workflows are continued. It’s not unheard of to finish in 28 days, which means time isn’t wasted in drawn-out periods. Why else would RICS manage over 1,300 cases last year, most of which were cash disputes? At this rate, it is no surprise that work is carried out efficiently.

Arbitration: A Fresh Coat of Paint

With the perception of arbitration being slow, it also faced the stigma of being costly, courtesy of large disputes. That’s what changed with the 2025 Arbitration Act. This puts us back to stronger cases being filtered out faster, thus making it easier to call arbitration a rational choice sooner rather than later.

Mediation: Let’s Chat Before It Gets Ugly

The judges have been advancing pre-action negotiations, which is just talking before any major moves, not surprisingly, it works outstandingly. Even better, nearly 80% of all cases brought forward to the Technology and Construction Court are completed before judgment – some of the controversies are simpler than one would think.

Communication: The Real MVP

Imagine if people talked more. Routine site meetings or even a brief telephone conversation help resolve minor issues before they escalate into major challenges. There is less opportunity for misunderstandings to occur with project applications, WhatsApp groups, and cloud-based drawings. There is less drama and more focus on completing tasks.

What’s Around the Corner for UK Construction Disputes?

The construction industry is always on the go with new regulations coming in, the economy changing, and even tighter restrictions for safety measures. A lot of companies are currently in pain due to the budget constraints and cuts.

There is good news, however. Stronger contracts combined with smarter technology and improved communications make it easier to manage disputes and keep the projects on schedule.

Conclusion

Unsurprisingly, the most problematic aspects are variable contracts and misleading scopes with sneaky ‘scope creeps.’ Quick adjudication has a hand in the solution, but sometimes a more holistic approach is necessary. With the UK Government’s Payment Practices Reports, Beale & Co’s Dispute Landscape, or the TCC’s annual stats, tailored solutions can be discovered.

More about Business Planning