The effects of COVID-19 and concerns about unforeseen events have caused both owners and contractors of infrastructure projects to re-evaluate how to best mitigate risk and manage disputes more efficiently. Some elements of planning will remain the same, and others will require creativity, but there will undoubtedly be heightened scrutiny by both sides.
Below is an overview of the current state of infrastructure arbitration in Canada that organizations in the construction industry should know about:
While claims related to delays, disruptions, supply chain problems, price increases for materials and other project issues are on the rise, there have been fewer force majeure and material adverse change claims than expected. Parties have tended to cooperate instead of litigating. Whether this trend continues post-COVID is left to be seen.
Largely viewed as faster and more confidential, arbitration remains the preferred dispute-resolution mechanism. Coincidentally, virtual arbitration has become the new normal, and there has also been a hybrid mix of virtual and in-person hearings. Given the current state of the world, we expect this trend to continue for the foreseeable future.
There has been an increase in risk assessment to address concerns such as schedule slippage, cost overruns, quality concerns, and labour and material shortages. Personnel that excel at assessing risks continue to be in very high demand, both on the project level and when litigators get involved. Similarly valued is creativity and collaboration in approaching complex issues like COVID and other similar challenges.
Tracking down records in a virtual world has become more challenging. While the demands on records personnel have increased, staffing numbers have not necessarily kept pace. New strategies are being implemented to help rectify this issue.
Both owners and contractors are working hard to anticipate and mitigate unexpected disruptions. They are forming committees and establishing channels of communication at many levels throughout each organization. Sometimes key project players and team members are firewalled from the group addressing disputes to allow project activities to maintain momentum while the parties resolve their disputes.
Have more than five minutes? Contact any member of our Arbitration or Infrastructure/P3 groups to learn more, or view our recent infrastructure arbitration webinar about these and other updates.
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