How long can construction contract claims take to resolve?
One of the reasons construction contract claims can be so damaging, isn’t just because of the impact of the cause of the claim itself, but because of the time that a claim can take to resolve.
The longer a claim goes on for, the more time and financial resource it demands. That can bring construction projects to a grinding halt, having a further knock on effect to cash flow. It can also cause the complete breakdown of relationships mid build and in the worse case scenario, possibly prevent it from being completed at all.
None of these are insignificant repercussions in their own right, and collectively can be extremely damaging. All are reasons that we work with clients to try to resolve construction contract claims at the mediation stage wherever possible.
However, we always work to safeguard our clients’ contractual and commercial interests, whilst maximising their financial return, which sometimes means a construction claim can continue to arbitration and even litigation in unusual circumstances.
The likelihood is that the earlier a claim is recognised and addressed, the earlier it will be resolved and the less impact it will have on the project. However, even with the best will in the world, construction contract claims can run on for a long time, and if not addressed properly, that could stretch into years.
How long do you have to bring construction contract claims?
In terms of the length of time in which you can bring a construction claim, that will depend on the global jurisdiction that you’re operating in. In England, most construction contracts provide for a ‘defects liability period’, which may run from 12 to 24 months after completion.
The worst case scenario
Once raised however, asking how long it can run for brings pieces of string to mind. In the experience of one of our consultants, the longest running claim we’ve come across went on for an astronomical 19 years. Needless to say, we were not the ones working on it at the time, and once our construction claims consultant was on the scene it was resolved in a matter of weeks.
Average duration of construction claims
While that’s very much a once in a lifetime situation, construction contract claims can still go on for a long time when considered in the context of a project’s lifetime.
An annual report into Global Construction Disputes back in 2011 showed that the average UK resolution time was 8.7 months in 2011 compared to 6.75 months in 2010. Meanwhile, disputes in the United States took the longest to resolve at an average of 14.4 months.
That’s nearly a whole year taking time, resource and concentration away from a project, no doubt preventing it from moving forward and realising any value through sale, rental income or use.
It’s important to note that every case is individual and there’s no one size fits all approach, that will give you your answers if you’re facing a claim, without speaking to an expert.
If you have a claim you would like to discuss, contact our global team by following the link below.