Workload has dropped significantly after peaking in 1997 and is not expected to recover till around the middle of next year. With extremely tight cash flow and nominal profit margins, more disputes can be expected to surface between contracting parties. This will, in turn, create greater strain on companies' cash flow and eat deeper into their profit margins. The construction industry must beware of slipping into this vicious circle. It is to the benefit of all parties concerned to minimise disputes and, where these are unavoidable, to consider more cost-efficient ways of resolving them.
Construction projects can be fertile grounds for breeding disputes.
Obligations and responsibilities are passed back and forth along this chain. Any miscommunication or misunderstanding could result in minor disagreements which, if dragged over time, could easily escalate into full-blown disputes with severe implications on the project. Disputes will add to the costs of doing business for all parties and delay projects. The parties involved become distracted from their principal tasks, which is to deliver quality projects within both time and budget. When disputes escalate, everyone in the chain suffers, including the customer at the end of the chain.