Construction Claims in UAE
Claims and disputes occur frequently in the construction industry between different contracting parties, mainly the owner, and the contractor. Resulting, devastating effect on construction projects, as they may result in cost overruns, delays, and loss of productivity. Construction industry in UAE, is one of the most vibrant sectors, experiencing a high level of construction disputes and claims. Claim resolution aims to identify and assess the major causes of disputes. The top five sources of disputes in the UAE are variations initiated by the owner, obtaining permit/approval from the municipality and other governmental authorities, material change and approval during the construction phase, the slowness of the owner in decision-making, and the short time available during the design phase.
Disputes mainly arise from claims resulting from differing site conditions, delays, design errors or changes, acceleration or suspension of work, construction failures, and additional or deleted work
As for the avoidance and the resolution method, the most effective method was found to be negotiation.
What are the Sources of Construction Disputes?
- Designer-Related Disputes
If the design time is very limited, the design may lack specific details and accuracy. Poor design occurs when the design is nonfunctional, has missing elements and does not meet the owner’s requirements. Changes in material specifications and the subsequent approval process may take time, and cause disputes regarding the additional costs of the new materials and delays.
- Owner-Related Disputes
One of the most common causes of disputes is the slowness of the owner’s decision-making process, which delays the construction process. Owners may request variations such as adding or deducting from the previously agreed scope, which cause disputes since some variations may result in additional time and cost. If the owner cannot finance the project on time, construction will be delayed and the project might stop for a certain period until the owner is ready to finance the project, which creates disputes
- Contractor-Related Disputes
Inadequate financing by the contractor during construction leads to delays, work interruption, and poor quality of subcontractors’ work. A poorly defined scope of work is a type of contractor dispute. Poor supervision and site management by the contractor can cause accidents and delay the construction process. Site management is a major factor of construction disputes led by the contractor. Contractors can be asked to stop the construction process if the contracting company is not capable to continue to make progress in the project.
- Contractual Disputes
A poorly written contract leads to different interpretations of the same issue, and that leads to an argument, which later on develops into a dispute. Contradictory and inaccurate information in the contract document is when the contract needs to be very accurate and needs to be revised before an agreement between the parties is made.
Waiting until the end of the project to deal with disputes makes them harder and costlier to resolve.
Contact us now for further Assistance
+971 6 714 4 900