Guest Foreword: White & Case LLP

Download as pdf or txt
Download as pdf or txt
You are on page 1of 2

Guest foreword

White & Case LLP


Ellis Baker
Partner, White & Case LLP

The annual Global Construction Disputes for the first time in three years and by
Report from Arcadis provides valuable 15% on average. The increase of almost
insights into the world of international 18% in North America was set against
arbitration – and other forms of dispute a background of lower dispute values, a
resolution – not readily available from contrast mirrored in the UK; time taken
other sources. The insights fall into two increased in Continental Europe and
categories: the nature of the disputes the Middle East too, but so did average
and the means of resolving them. The dispute values.
‘turbulent times’ through which the world
continues to pass have their effect on Anyone involved in international
both, and this is reflected in the content of construction dispute resolution, as I am,
the 2022 report as well as in its title. will find the increase in duration readily
understandable. The whole industry
The effect of COVID-19 in generating has had to adapt to new challenges:
conflict in construction is particularly difficulties with site visits, absences
interesting, although (or perhaps through illness of tribunal members,
because) the picture is uneven across counsel or witnesses and proceedings
the regions. In North America, nearly conducted entirely remotely. It may
70% of respondents had encountered be that, in the future, virtual hearings,
disputes from this cause, and in the UK a for example on procedural issues, can
remarkable 90% (up from 75% in 2020); actually save time, but the experience
in Continental Europe the number had of the recent past has been more of
actually reduced, while in the Middle East disruption to schedules and adaptation to
it is already anticipated that such claims circumstances.
will become less prominent as “post-
pandemic normality” returns. Physics Nobel Laureate Niels Bohr
famously quoted the old Danish proverb
The consequences of supply chain that “Prediction is very difficult, especially
problems as a cause of disputes are if it’s about the future”. In welcoming
widely canvassed. In North America, the 2022 Arcadis report it can truly be
they are seen as currently the most said that, by shining a light on recent and
significant factor, and a ‘central’ cause in current trends in construction dispute
the Middle East, though the origins of this resolution, it has given us at least a sound
phenomenon certainly extend beyond basis to see ahead, as we go forward into
COVID to the Ukraine crisis in Continental times which look set to remain turbulent.
Europe and possibly the after-effects of
Brexit in the UK.

The Arcadis report also confirms that


the various forms of turbulence exert
pressure on the practice of dispute
resolution. It is surely not coincidence that
one of the headline findings is that the
time taken to resolve disputes increased

5
Successfully navigating
through turbulent times
Current events have lockdowns in major global powerhouse chain is under pressure to keep up with
cities such as Beijing and Shanghai in the continuing demands for commodities
introduced a high degree early 2022, which then impacts the global like diesel fuel, steel, silicones, plastics,
of anxiety and uncertainty economy. At the same time, we continue semiconductor, and countless others. The
to face an ongoing fight against climate construction industry competes for many
to the construction change, social injustice, population of the same commodities that are needed
industry across the globe. growth, and the resulting demand for by other, equally urgent, buyers of these
natural resources that continues to goods such as automotive manufacturers
put increasing strain on societies. The and energy producers, resulting in high
The tragic Russian invasion of Ukraine current social and geopolitical issues have demand for warehouse space as scarcity
has caused a substantial setback to the resulted in unprecedented impacts to of common materials leads to material
world economy, and as humanitarian supply chains, labor shortages, inflation, hoarding. Labor costs are also rising as
efforts continue in neighboring Poland and debt. employers pay premiums to maintain
and Romania, sanctions on Russia have staffing levels to combat the industry
created an economic impact felt in nearly Despite today’s challenges, construction shortages of skilled workers.
every corner of the world. And while presses on to meet societal needs.
many regions have experienced a reprieve Construction markets remain competitive
The US construction market experienced
from the social and economic impacts as builders struggle to overcome these
nearly 10% growth in 2021. The UK
of the COVID-19 pandemic, there are challenging conditions while owners
experienced similar growth in 2021
still many areas that are experiencing attempt to deal with the added risks
and economists predict nearly 15%
record-breaking surges of the coronavirus from economic threats. Builder pricing
growth in the UK in 2022, with similar
infection. Nearly 200 million people to owners remained stable throughout
trends in other regions. As the need for
have been impacted by the COVID-19 the first half of 2021 despite soaring
construction continues, the global supply

Current events and challenges affecting the construction market

Social and economic factors Impacts to the construction industry Mitigation techniques
• Russian invasion of Ukraine • Supply chain impacts • Proactive risk management
• COVID-19 pandemic • Material cost increases • Alternative project delivery
• Climate change • Delays • Contingency planning
• Inequality • Labor shortages • Pre-purchasing materials
• Population growth • Impact to bottom line • Constructability review
• Natural resource demands • Increase in claims activity • Willingness to compromise
6

You might also like