Is litigation or arbitration right for you and your construction claim?
When it comes to offering a client advice on construction claims, we pride ourselves on being realists (even if we are optimistic ones).
Where many claims consultants offer the world and charge accordingly, we will always tell our client what they can realistically expect to receive from the claim rather than simply telling them what they want to hear.
Our priority is always to protect the interests of our client. That’s not just in terms of finances, but in relation to keeping projects on track where possible and maintaining relationships where feasible.
For that reason, we always try to find a way to resolve an issue ultimately through some form of negotiation.
However, with the best will in the world, there are times where that is just not possible and progressing the matter to arbitration or litigation is the only available course of action.
Moving to these stages really is taking things up a notch and for many, the prospect is both financially and psychologically daunting.
It’s not always about the legitimacy of a claim
Because of the nature of people and the market however, it isn’t always the legitimacy of the claim or even the quality of the documentation prepared by the consultant that’s the deciding factor in whether contractors feel able to pursue a valid claim to these litigation stages.
Often it comes down to whether or not the claimant has the financial resources to risk in continuing to pursue the claim, and frequently major developers and project owners know that.
So it comes down to a rather expensive game of chicken.
Levelling the playing field
While that’s good, if somewhat risky news for some, it doesn’t make for a particularly fair playing field in the construction industry for those who are perhaps less financially willing to take such on a huge risk.
For that reason, our claims fund, Quantura, and its extension to different regions around the world (which now includes the Middle East, South Africa and Australia), is about more than simple financial convenience for many. It’s also a gateway to a fairer industry
Now, this is not a mandate to suggest that everyone starts taking a more aggressive stance, like litigation, when it comes to construction claims. Far from it.
We would still always advocate that if you can resolve a claim amicably, then that almost always the best approach. However, having the fallback of knowing that if you have to escalate matters, then you can do so without risk, can help to level the playing field and make for a more equal discussion between peers.