Many in the construction and development sectors will be approaching this year’s holiday season breathing a sigh of relief and hoping for a well-earned break. A year of modest growth, construction price inflation and robust lending requirements meant 2023 was not without its challenges. That commercial backdrop was reflected in the types of disputes that came before the courts over the past year. Three main themes come to mind:
- New work falling in the UK by 1.9% in 2023 saw an increase in final account disputes. Parties needed to maximise returns from existing projects rather than looking to make a profit on the next job.
- Record contractor insolvencies highlighted tight cashflow in a challenging market. That resulted in a number of court cases arising from adjudication claims and enforcement proceedings.
- Finally, if the commercial backdrop wasn’t challenging enough in 2023, the industry continued to grapple with legacy defects issues, including the ongoing fire safety scandal and defective RAAC concrete issues. Legacy defects resulted in a series of cases before the courts covering latent defects issues and the timescales for bringing claims.
We’re all hoping the outlook for 2024 will be better. Developers are reported to have reached a “tipping point” on building costs due to slowing construction and easing energy prices. Funders continue to look for the right investment opportunities. The introduction in the UK of the Building Safety Pledge has forced housebuilders to take responsibility for legacy defects, with a number of schemes finally commencing long overdue remedial works to make homes safe and habitable.
