Construction Disputes to Become More Complex?

Partnering agreements are designed to encourage two parties to work together as a team and trust one another. What then happens when a dispute arises and there are very few (if any) site records? Is the adoption of partnering principles the best way forward?

It is true that contractors and sub-contractors involved in framework deals and/or partnering agreements appear to be weathering the storm better than most, but at what risk?

Messers, Banwell (Sir), Emerson (Sir), Latham (Sir), Egan (Sir) and now Wolstenholme have all advocated and encouraged partnering and working as a team.

Sir Michael Latham, the author of ‘Constructing the Team’ suggested, ‘through teamwork the construction industry could delight its customers’ [Latham,1994].

There are many opinions upon what constitutes collaborative working or partnering. As the Latham report is perhaps the best known, I feel it prudent to commence with the description contained within ‘Constructing the team’,

"[a] contractual arrangement between the two parties for either a specific length of time or for an indefinite period. The parties agree to work together, in a relationship of trust, to achieve specific primary objectives by maximising the effectiveness of each participant’s resources and expertise" (Latham, 1994).

One of the industry’s most outspoken experts Rudi Klein, believes ‘Partnering is either about trust and transparency or it’s about two parties shafting each other. (Klein, 2007)

Whilst the primary objectives of partnering was to improve industry performance in terms of quality, certainty of price and delivery, Latham had hoped to reduce the adversarial nature of the industry and in turn reduce the number of construction disputes.

‘9.3 The best solution is to avoid disputes. If procedures relating to procurement and tendering are improved, the causes of conflict will be reduced. If a contract document is adopted which places the emphasis on teamwork and partnership to solve problems, that is another major step’ (Latham, 1994).

So are partnering agreements reducing the quantity of disputes? Negotiation, mediation and adjudication are the preferred dispute resolution options in both traditional and partnering contracts and therefore many construction disputes remain private. In the majority of instances, the only figures and case law available to analyse is whereby a project dispute has arrived at court for enforcement.

Partnering Agreements work on the principles of trust and ‘working together’; therefore one would assume that the need for extensive site records is reduced; if this is so, what then happens should a dispute arise? Formal disputes that have arisen from partnering agreements have often been more complex, more costly and have taken longer to administer than a "standard dispute" This is largely due to parties trust under a partnering agreement and the subsequent reduction of site records.

The Government has recently appointed a ‘Chief Construction Officer’. Paul Morrell has been tasked with advising the Government on the future of the construction industry. The Editor of the Building magazine, Chevin (2009) explains that Paul Morrell ‘is not the industry’s biggest fan of partnering’. Could this be an insight into the future of partnering within our industry?

I would argue that with the traditional adversarial nature of the industry and with everyone out to make money the likelihood of dispute under a partnering agreement is still prevalent.

Therefore if you enter into a partnering agreement, give them a cuddle, go and enjoy a beer, but take full and detailed site records in case things go wrong.



References

Latham, Sir, Michael (1994) Constructing the team: joint review of procurement and contractual arrangements. London H.M.S.O

Klein, R (2007) Know who your friends are, Building magazine, pg 61. (05.10.2007)

Chevin, D, (2009) The task facing Paul Morrell, Building Magazine, pg 1, (27.11.2009)