The Construction Industry is facing many of the same challenges as other businesses are experiencing at the moment such as staffing challenges, skills shortages, slow movement of supplies and raising costs.
Construction disputes arise due to a disagreement between parties involved in a contract. The violation may be perceived as a breach of the contractual obligations by either party.
While there are many reasons that lead to a construction dispute, here are some of the most common causes of disputes that we see in the construction industry:-
Uncertainty
Uncertainty in a project is often caused by the lack of information needed to effectively plan and start a project. How much information is required can depend on the complexity of the project. Some of the basic information required to plan a project are the project scope, time and budget.
When some of this information is not available or when some of the information changes then this can lead to a high level of uncertainty and therefore this uncertainty can lead to a dispute.
Contractual Errors
A contract is designed to describe the obligations and the risks that each party is willing to take to complete a project. It is a good idea that you have a contract drawn up by a Construction Solicitor or reviewed by a Construction Lawyer . Sometimes the scope of a project may change over time due to unforeseen factors and it can force the parties to operate under uncertain terms. When conditions of uncertainty arise in a contract the risks and obligations may shift, and the parties involved may no longer agree and a dispute may occur.
Behavioural Problems
A good construction contract will cover most of the obligations and risks involved in a project. However, there will be some unforeseen factors that may not be covered by the contract. When a dispute arises, all parties will want to obtain the best solution for themselves, or one party may have unrealistic expectations of a project and sometimes one party will refuse to perform their contractual duties, all of these behaviours mean that the parties involved cannot reach an agreement.
Delays
Delays in a project can be very costly and can be caused by many different reasons such as delay in supplies, staff shortages, weather, equipment failure and mistakes. Delays in a project can lead to a dispute.
Dispute Resolution
If you are experiencing a dispute in a construction project, it is important that you take legal advice. In order to resolve the issue, it is vital that you record as much information as possible. Our Construction solicitors can assist with this. Please contact us on 0800 567 7595 or by email: enquiries@summerfieldbrowne.com
To apply for the loan, it was necessary to complete an application form which included various declarations including:
1 the annual turnover for the company in the last calendar year
2 the amount to be borrowed was not more than 25% of that annual turnover
3 the company was not insolvent or otherwise in business difficulty
The terms and conditions that accompanied the application form stated that the BBL must be used for the “economic benefit” of the company; there were no detailed guidelines on how this wording should be construed.
An unfortunate legacy of the Covid pandemic is that many companies have not survived, notwithstanding government support. Owners of such companies have appointed insolvency practitioners to liquidate their companies.
Where there is an outstanding BBL, insolvency practitioners have a duty to investigate how the loan was obtained and how the funds were used, and if they have any concerns, they must report them to the Insolvency Service. Concerns include where the directors of the company have made false declarations in the application or have failed to use the BBL for the economic benefit of the company.
Upon receipt of a report from an insolvency practitioner raising any concerns, it is standard practice for the Insolvency Service, or lawyers acting on their behalf, to investigate the conduct of the directors and write to the directors of the company. The letters follow a similar theme and confirm the reason for the investigation, which is to consider whether director disqualification proceedings should be commenced in accordance with the Company Directors Disqualification Act 1986. The letters identify the areas of investigation, and it is standard practice to include a questionnaire to be completed by the directors of the company.
If you receive a letter of this nature, it is very important that you take legal advice prior to completing the questionnaire. Our director disqualification solicitors can assist with this. Please contact us on 0800 567 7595 or by email: enquiries@summerfieldbrowne.com
