Covid-19 holds the key to quicker and cheaper construction disputes

July 29, 2020

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Lockdown has seen courts adopt virtual platforms such as Zoom to hear cases – with an uptick in hearings and decisions. Bill Barton, director of Barton Legal, says there is no reason why virtual hearings cannot become the norm for resolving construction disputes, bringing significant time and cost savings to an often tortuously slow and expensive process

It is often said that extraordinary times call for extraordinary measures. If nothing else, the last few months have proved the worth of this maxim. Faced with near-unprecedented disruption, Covid-19 has forced every sector to evolve at breakneck speed. This is particularly true of the construction and legal sectors, traditionally the Scylla and Charybdis of inertia in otherwise fast-moving waters.

After all, the government had recognised the need to give the construction sector something of nudge by streamlining the procurement process. In other words, a sector known for being old fashioned and often slow to embrace technology has had to reassess its attitude towards innovation and learned that new ways of working will be crucial to recovery.

This is particularly true for the legal side of the construction industry. Arcadis recently estimated that globally, construction disputes take 10 months to resolve and come with an average price tag of £20m. And although dispute resolution is now quicker compared to previous years, it can still be a huge – and partially unnecessary – burden for companies and their projects, especially during a time when margins are likely to be thinner and the number of disputes on the rise.

A new approach

The methods the construction courts have adopted during the coronavirus lockdown point the way forward to how disputes can become less costly and time-intensive, potentially bringing significant savings for every party in the supply chain. Namely, the Technology & Construction Court (TCC), which sits within the Business & Property Courts that have always been at the forefront of innovation, was one of the first to move trials and hearings to platforms such as Zoom when lockdown was enforced.

The usual length and costs of litigation are well-known for being burdensome and unattractive, but are made up of several parts that have been trimmed down by the introduction of remote hearings, which has naturally pointed out the shortcomings of traditional trials. For example, in-person hearings usually involve solicitors and counsel for both parties travelling to court; once they’re there, waiting times are long and delays frequent, meaning that hearings are often adjourned or only partially heard.

Virtual trials

As can be imagined, virtual hearings make this process far more time- and cost-efficient. As it happens, the TCC has heard more cases, and handed down more judgements, over the past few months of remote trials than usual. The timing of cases, meanwhile, has been more efficiently controlled and organised. The result for non-lawyers has been reduced costs and waiting times: an outcome that’s always been desired by anyone in business, but may be welcomed by the construction industry now more than ever.

Of course, there will be questions about ‘virtual’ document disclosure. In the past, scenes reminiscent of the last act of Agatha Christie’s Witness for the Prosecution would play out in courtrooms across the land, with never-before-seen documents suddenly brandished in front of the defendant’s face. Naturally, times have changed, with documents now disclosed in advance, with virtual trials thus representing not an aberration, but continued development.

Progress was already being made in this regard pre-Covid: a new disclosure policy meant that parties now have to agree what is and isn’t disclosed during a trial, and must explain their reasoning behind such decisions. All relevant documents and exchanges are then e-filed, therefore making the entire process smoother and more efficient.

Some of these pre-coronavirus developments in how documents are handled came about as a result of tougher cost penalties for parties who prolong litigation, rather than through a natural shift towards better use of technology. However, remote trials have pushed this progress further, by encouraging even better use of electronic bundles and practically removing the need for dozens of lever arch files, which not only require much manoeuvring on the part of lawyers presenting evidence in a physical court, but take up extra time and therefore financial resources to put together pre-trial.

It would be easy to look at each nut and bolt of a remote trial as separate details but in reality, these factors add up into significant benefits for contractors and subcontractors, and such cost and time savings simply cannot be overlooked. More so, the construction courts are in a position of privilege when it comes to their ability to adopt virtual hearings, because not every legal dispute can be easily – or even feasibly – settled via video link. It’s difficult to see criminal trials, which rely on juries as well as judges, for example, ever evolving to a point where Zoom is as desirable a location as a courtroom.

Construction, however, is excellently placed to adopt virtual hearings in the long-term and given the benefits they bring to all parties involved in a dispute – be they solicitors, barristers or their clients – the sector would be missing out on a chance to significantly lift the burdens of litigation. And unlike the changes being made to the procurement process, it is not government intervention that will bring about this new era in construction law, but the change has to come from the industry itself.