Preserving good business relationships even when there’s a construction claim
Business relationships are pivotal to the success of a construction project and, should a claim arise, so is making sure it doesn’t derail the entire project, as well as future ones.
The underestimated value of trust
Trust is one of the most valuable commodities you can have on a building project and in business relationships. Its principle spans the colloquial as well as judicial, but its principle remains the same regardless. You trust that an agreement will be honoured.
For all the systems, preparations, plans and due diligence that you employ, at some point business relationships boil down to trust. Trust in your contractor that he will do the work and navigate any unexpected changes that arise honourably. As well as trust in the project owner that they will pay the bills and act within reason if anything unforeseen occurs.
Strain on relationships is almost inevitable
This intangible asset, trust, comes under its greatest pressure when a claim arises. We have spoken at length about the fact that it’s almost unheard of for a large construction project to run from start to finish without a hitch. It’s almost inevitable that a claims notice will arise at one stage or another. The natural reaction from either party is to get defensive and lash out. That’s how claims can quickly escalate from being resolved within the more genteel environment of mediation and arbitration, to the aggressive and less predictable realms of litigation.
If the project is incomplete, which it often is at the point of handling a claim. The breakdown of relationships can bring into a complete standstill, adding further strain to budgets which, by dint of a claim arising, are no doubt already under pressure. It leaves money tied up in an asset that may well have been destined for sale or commercial use. It diverts funds into the claim instead of the completion of the project (unless you have access to our claims funding initiative), and all the while there’s no guarantee that the project will then continue. Especially if relationships become so sour that they are completely unmanageable moving forward.
The future impact of a relationship breakdown
Even if the project is complete by the time a claim is being thrashed out, or if you do manage to muddle through and complete it following the settlement of an acrimonious claim, the chances are that if the relationship has been ruined beyond repair, it can have a knock on effect in the future. Perhaps someone in that team has a particular skillset you may need on another project, or contracts and loyalties may be such that even if you have new contractors on future projects, the broken relationship may present barriers.
Furthermore, no one wants a reputation for falling out with the people they work with. No matter who is at fault, a badly handled claim and the breakdown of a relationship is no good for anyone, no matter who technically wins.
Knowing how best to serve the client’s interests
For all of these reasons, our team of experienced construction claims consultants are always mindful of giving advice that will have the best outcome for the client in all ways. It is always preferable to deal with a claim earlier rather than later in order to try to settle it at mediation. However, it’s also important to treat each claim individually, recognising what’s valuable to the individuals involved, and trying to overcome the heat of the moment in order to find the best solution for the long term.
In all cases, if relationships can be preserved at even a cordial level, it has a big impact on the ability to resolve the claim to everyone’s satisfaction, as well as have positive solutions for the construction project itself. While many claims consultants may look to promise big, punishing wins, it isn’t always the most valuable, productive, or even realistic solution, and can lead to a worse situation than you started with. It takes experience, empathy and understanding to recognise, but as a team who are always dedicated to protecting the interests of our clients in all ways. That means recognising that the value of relationships should never be underestimated.