Construction is a rather complex business. It requires the joint effort and coordination of many different entities. At times, this often makes room for a variety of construction claims. Construction and risk go hand-in-hand. Construction projects are endlessly dealing with challenges which normally arise from budget, schedule, and workforce
Disputes and conflicts will inevitably arise in any construction project. Conflicts are inevitable and endemic in the industry. In the construction industry, it is obvious and evident that construction claims are very complicated. The major players involved have varying interest and carry conflicting business requirements that lead to issues and disputes. As a matter of fact, these disputes affect everyone working on a construction project. Normally, multiple parties are involved in the conflict. Understanding the nature of claims and what gives rise to them and conducting an effective and efficient risk management review early in the construction project will hopefully aid all that are involved to an agreement and eventually profit and benefit from the construction undertaking since it is not possible or realistic to contemplate that all claims can be avoided or will be handled properly. Managing and resolving these claims as they occur can be complicated and difficult and likewise stressful for all parties involved.
Construction claims are measured by many project participants to be one of the most worrying and unpleasant events of a construction project.
Disagreement can and do arise in the construction industry. As much as it can be avoided, it will eventually happen no matter what. If negotiation and consultation fail to resolve the dispute, arbitration or litigation follow suit. Claims might be made for loss and expense, extension of time, liquidated damages and so on. Claims in case can arise in a myriad of contexts.
Risks that threaten the smooth execution of a project are considered implementation challenges that the construction industry is subject to. Once these so-called risks become a reality, they give rise to cost escalation and time delays which will later lead to claims. Usually, claims are a major source of conflict between parties in the construction industry. These claims can eventually deflect considerable resources such as finances and time.
Construction claims can be caused by a number of factors. Understanding and analyzing the causes and reasons of construction claims are the initial steps in avoiding them since these claims are often a costly process. Claims are a management issue, and the whole process needs efficient and effective management during the entire duration of a project. Mostly, claims relate to the encountered circumstances which occur during the construction stage. With workers of varying skill levels, expensive equipment and materials and a huge deal of expectations involved, conflicts are hard to avoid in the construction industry. So much can happen during the whole duration of a project. Disagreements involving constructions are likely to happen and are not expected. However, when these conflicts are escalated to the next level, they don’t have to lead to claims. Claims can be prevented and disagreements can be settled in an early stage.