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Insights on claims and disputes

How long a construction dispute actually takes

The formal stages have timetables. Everything around them does not, and that is where the years go.

Asked how long a dispute will take, most people answer with the length of the formal process. That is the one part with a published timetable and it is rarely the part that takes the time. An initial dispute review is usually measured in days, and the decision that follows it determines whether the rest takes months or years.

Understanding where the time actually goes is useful for two reasons. It makes the cost realistic, since management time accrues for the whole period rather than for the formal stages. And it shows which parts of the delay are within your control.

The stage nobody counts

Before anything formal happens there is a period of correspondence in which both sides restate positions. It has no timetable, no end point and no mechanism for resolving anything, and on many accounts it runs for a year or more.

It persists because each exchange feels like progress. A letter goes out, a reply comes back, somebody drafts a response, and the sense of movement substitutes for actual movement.

This is the stage most worth shortening, and the only way to shorten it is to decide what you are doing. Establishing the position and then choosing a route turns an open ended exchange into a decision with a date.

Assembly takes longer than people expect

Preparing a claim properly means finding documents across several systems and several people, reconstructing a sequence, measuring where measurement is needed, and setting out the figures so somebody else can follow them.

On a project that ran for two years with ordinary records, that is weeks of work rather than days. Where the records are poor it is longer, because the time goes on establishing what happened before anything can be said about it.

This is also the stage most affected by how the project was run. Good contemporaneous records can cut it by more than half, which is the practical argument for keeping them.

Where records have to be reconstructed, the work is not only slower but less useful. A sequence assembled afterwards from invoices and recollection carries less weight than one taken from documents written at the time, however carefully it is put together.

The formal stages do have timetables

Adjudication in particular runs quickly once it starts, which is its main attraction and its main risk. The timetable does not wait for your preparation, so the work has to be substantially done before the notice is served.

Other routes run to different rhythms. Negotiation and mediation take as long as the parties take, which can be a few weeks or considerably longer.

What all of them share is that they are shorter than the informal period that precedes them. The formal stage is rarely why a dispute took three years.

Where the delay actually comes from

Waiting for a decision that nobody has been asked to make. Documents that take weeks to produce because the person who has them is busy. Positions that change because a new person has looked at the file. And the gaps between exchanges, which are individually reasonable and cumulatively enormous.

Most of those are internal. They are also the ones within your control, which makes them worth attention: a dispute run as a project with owners and dates behaves very differently from one that happens in the margins of everybody’s other work.

The external causes are real but fewer. The other side’s timetable, the availability of a third party and the complexity of the issues all add time, and none of them is the usual explanation.

A useful exercise on any long running dispute is to lay out the dates of every exchange and mark which side was holding it at each point. The result is frequently uncomfortable and it shows exactly where the time could be recovered.

What shortens it

Deciding early. A dispute that gets a deliberate decision in month one takes a fraction of the time of one that drifts for a year first, because the drifting period is pure addition.

Narrowing the issues. Three items worth most of the money settle faster than thirty items of which twenty seven are small, and the small ones rarely survive scrutiny anyway.

Having the records. This is the one that cannot be fixed later, and it is why the decisions that shorten disputes are mostly made during the works rather than after them.

Planning around it

Assume the period before resolution is longer than the formal stage suggests, and budget management time across the whole of it rather than only at the milestones. The quiet months still consume attention, and they are the majority of the period and they are not free.

Where cash flow depends on recovery, treat the timing as uncertain rather than programmed. Accounts that were expected to close in a quarter and close in two years cause problems out of proportion to the sum involved.

Where a dispute is already long running, the same planning applies backwards. Setting a date by which a decision will be taken, and sticking to it, is usually the single most effective thing a business can do to a dispute that has been drifting.

And treat the first decision as the one that matters. Everything after it is execution, and execution runs to a timetable; the period before it does not. The narrower services under claims and dispute advisory each exist to turn an open question into a defined piece of work, which is the point where a dispute starts having a shape. The discipline that avoids the whole sequence is cost control and variations during the project.

Not sure whether the claim is worth running?

An initial dispute review reads the contract and the correspondence, tests whether an entitlement exists and tells you what the dispute is likely to absorb before you commit to it.

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