Conflict is an inevitable part of life. Unfavourable outcomes are not.
Reasonable and respectful dispute resolution is essential in every industry across the board, including construction. Most parties typically want the matter solved as soon as possible to minimise disruptions to the construction process. So managing conflicts and disputes is vital.
In this blog, we’ll chat about some of the common causes of disputes in the construction industry. We’ll discuss the early stages of the dispute resolution process. And we’ll explain how experienced construction lawyers can make the process simple, easy and, most importantly, quick.
In this article:
- Disputes in the Construction Industry
- Causes of Conflict in the Construction Industry
- The Dispute Resolution Process
a. QBCC and QCAT – when the issue is with a client
b. When the issue is with a supplier
- How Brisbane Construction Lawyers Mediate and Resolve Conflicts
Disputes in the Construction Industry
The construction industry is synergetic. One project could have many different companies, suppliers, contractors and sub-contractors working together. And, as you might expect, many chefs in the kitchen can of course sometimes lead to disputes.
When you work in the building industry, you may have an issue with one of your employees, contractors, suppliers or even customers and clients. Or one of them may have a problem with you. These conflicts often arise from:
- Unfulfilled contracts
- Defective work
- Non-completion of work
- Failure of payment
- Misleading/deceptive conduct
- Insurance issues
- Changes in project terms/scope
- Completion delays
The Construction Dispute Resolution Process
When there’s an issue in the construction process, where do you turn?
When the issue is with a client
If a home owner or commercial building owner has an issue with a builder or contractor, their first step is to give written notification to the other party. If the issue isn’t resolved, and they’re still unhappy with the result two weeks after written notification, they may submit a Complaint Form with the Queensland Building and Construction Commission (QBCC).
Whether the QBCC can assist depends on the nature of the issue, for example, whether it’s a payment, contractual or building work issue. However, if the QBCC is able to step in they will then try to discuss and assess the issue with both parties to reach a fair resolution. If they aren’t able to resolve the issue through discussion, a QBCC Building Inspector may need to inspect the site and may issue a Direction to Rectify.
If you are unsatisfied with this decision, you may apply to have it reviewed by the Internal Review Unit. Or you can apply to the Queensland Civil and Administrative Tribunal (QCAT) for a review.
If you are proceeding to the tribunal, it’s a great idea to get legal advice or assistance. While you’ll typically have to represent yourself at the tribunal, an expert can help you prepare.
Read more about dispute resolution tips for contractors here.
When the issue is with a supplier, builder or subbie
Many other relationships within the construction industry can lead to disputes. For example, between supplier and builder, sub-contractor and building company, and even between the various trades.
When conflict arises between a supplier, builder or subbie, the dispute resolution process typically involves:
- Negotiation: A genuine conversation where both parties hope to achieve a reasonably fair outcome is often a great start. This can be done with the help of lawyers or independently, depending on how serious the nature of the dispute is.
Legal representation can be useful to get matters on record and formalise the process. It’s also always a great idea to have an expert in your corner.
- Mediation: A third-party mediator can be helpful to reach a fair decision about how to move forward to resolve the issue. Again, this can be conducted with the help of a lawyer or independently.
However, if you’d like to make the decision legally binding, a lawyer can help to make it a formal agreement.
- Arbitration: Here a third party helps the parties to reach a decision. The difference with arbitration, however, is that the outcome is legally binding.
- Charge over property: If you have been awarded an amount via the adjudication process, but haven’t received payment by the due date, you may be able to request the registration of a charge over the property. If the debt isn’t paid, you can apply to have the court sell the property to recover the debt.
- Monies owed complaint: You can also file a complaint with QBCC when a QBCC licensee has not paid a debt they owe that has been required by an order by the adjudicator, court or tribunal.
- Subcontractors’ charges: A subcontractor’s charge allows a subbie to bypass the contractor and put the property owner on notice for monies owed. The work must be done under your subcontract and the contractor can’t have been paid in full.
- Work suspension: If the homeowner (or principal contractor) doesn’t make a scheduled or adjudicated payment, the contractor can suspend work. They need to give two days’ notice and need to recommence work three business days after the scheduled payment has been made.
- Adjudication: Unique to the building and construction industry, the ‘adjudication’ process is set out by the Building Industry Fairness (Security of Payment) Act 2017, and describes how you can secure payment using that process.
- Litigation: Alternatively, you can seek redress with the courts through conventional litigation proceedings.
The resolution options for conflicts between builders, suppliers or subcontractors are typically:
- Charge over property
- Monies owed complaint
- Subcontractors’ charges
- Suspending work
- The courts
How Brisbane Construction Lawyers Help
If you’ve been unable to solve your dispute by the methods listed above – perhaps the other party has failed to act on mediation advice or is refusing to negotiate – then taking legal action might give you the best chances of a fair outcome.
Qualified construction lawyers will be able to explain your legal rights, risks and entitlements. This means that you’ll understand exactly where you stand and how best to proceed.
Your lawyer will collect all of the facts and the outcome you’re looking for and present them to the other party. They may then enter into the dispute resolution process to help you achieve a smooth resolution.
Sometimes simply hiring a lawyer will turn the process around. You may not even need to go to court to resolve the matter.
Get Expert Legal Advice Today
At Victor Legal, we’re experienced construction and dispute resolution lawyers. That means we have the knowledge and experience to help you manage any and all construction disputes whether they’re with a contractor, a subbie or a customer. Contact us today!