Building projects are fraught with risk of dispute. The risk can be mitigated, but not avoided, by taking care right from the start. It is sensible to prepare a schedule of the works to be undertaken before builders are appointed and in anything but the most modest case to engage the services of a qualified surveyor or engineer to prepare the schedule of works, the contract and to supervise the tender process and subsequent performance by the builder.
Construction is an increasingly technical area and it is this together with the frequency with which building specifications change midway through a build - perhaps because the customer changes their requirements or there are unforeseen problems [- perhaps with the site] which causes these contracts to carry such a high litigation risk.
There are a number of standard form building contract precedents in use of which the "JCT" published by RIBA [the Royal Institute of British Architects] is perhaps the most well known, but there are others promulgated for example by the Institute of Civil Engineers. Care is needed because there are different types of contracts for small and major works.
The theme of these contracts tends to be:
- A definition of the works to be undertaken.
- A definition of the contract price.
- A provision empowering the supervising professional (architect/surveyor/ engineer) to direct variations to the contact - and how payment for these should be calculated.
- Provisions for payment - normally at intervals throughout performance with a final payment upon "practical completion" - the date when the architect certifies that the job has been substantially completed.
- A timescale in which the contract has been fulfilled - and provision as to what the consequences will be if the contract is not completed in the due time.
In small building works this amount of detail has often not been contemplated by the parties in advance and often in the event of a dispute there needs to be a careful process of considering the documents, plans etc., to establish what has been incorporated into the contract.
Once a dispute has arisen a decision needs to be taken as to what is the most effective forum for resolving it. Because of the complex technical issues often thrown up by even relatively small building disputes litigation has a tendency to become protracted and expensive. Methods of resolving disputes include arbitration [not necessarily quicker or cheaper but providing a binding resolution by a technically qualified arbitrator], mediation a non binding process designed to encourage agreement or conventional court proceedings.
A feature of building disputes parties are often directed by the Court to file and serve a "Scott Schedule". This is ancillary to the usual proceedings in which the issues in dispute are set out in a tabulated form describing the issue in dispute, with further columns summarising the position of each party and a final column allowing the Judge or arbitrator to add their conclusion. This conveniently enables the parties and the Judge to identify the issues in the case at a glance.