A third of JVs end up in legal disputes

One in three construction joint ventures end in disputes, according to research by consultant Arcadis.

The firm, which looked at disputes on major construction projects across the globe, found 35% of joint ventures had disputes in 2013, up from 19% in 2012.

Arcadis also said the average value of disputes rose to US$32.1m (£19m) last year, up from US$31.7m (£18.8m) in 2012.

The report, entitled Global Construction Disputes: Getting the Basics Right, said that disputes were largest in Asia, where the average value was US$41.9m (£24.8m).

It is the fourth year Arcadis has run the research and the value of UK disputes rose to their highest level recorded, averaging US$27.9m (£16.5m).

The average value of disputes in the US and the Middle East was US$34.3m (£20.3m) and US$40.9m (£24.2m) respectively.

The research also found disputes took less time to be resolved in 2013, at an average of 11.8 months, down from 12.8 months in 2012.

Mike Allen, global head of contract solutions at Arcadis, said “complex” and “fast paced” construction programmes created “numerous points at which a dispute can occur”. 

He said: “Many of these disputes are resolved out of the public eye but do often result in heavy costs and time overruns.  Our research indicates the scale of this problem and highlights the need for better contract administration, more robust documentation and a proactive approach to risk management to help mitigate against the most common causes of dispute.”

Arcadis said 2013 was the year of the “mega-dispute” with its teams working on three separate disputes worth over US$1bn (£593m), including the Panama Canal expansion project.