Construction dispute solicitors in Scotland

Construction and engineering disputes we handle

The construction industry runs on cash flow, and a dispute on one construction project can quickly affect a business’s ability to pay staff and suppliers. Whether you are owed money for work done, facing a defects claim or caught up in a delay, our construction dispute lawyers give practical, commercially focused legal advice from our Glasgow office, on projects across Scotland.

Our construction solicitors act in contentious construction matters for contractors, subcontractors, developers, funders, public sector bodies and private building owners. We deal with construction and engineering contracts on commercial, residential, infrastructure and renewable energy projects. We regularly act in disputes about:

• Unpaid interim and final accounts
• Payment and pay less notices
• Variations and valuation of work
• Defective work and design
• Delay and extensions of time
• Liquidate damages for late completion
• Loss and expense claims
• Retention money
• Termination of a building contract
• Collateral warranties and guarantees
• Professional negligence by architects and engineers
• Disputes with a builder over domestic work

Construction adjudication in Scotland

Adjudication is one of the most widely used ways of resolving construction disputes in Scotland. The Housing Grants, Construction and Regeneration Act 1996, often called the Construction Act, gives a party to most construction contracts the right to refer a dispute to adjudication at any time. If the contract does not contain compliant adjudication provisions, the Scheme for Construction Contracts (Scotland) Regulations 1998 fill the gap.

The adjudicator must reach a decision within 28 days of the referral. That period can be extended by 14 days with the consent of the referring party, or longer if both parties agree. The decision is binding unless and until the dispute is finally decided by litigation, arbitration or agreement, and the courts will usually enforce an adjudicator’s decision quickly.

Adjudication moves fast, and the party that prepares best usually has the advantage. We act for referring parties and responding parties, prepare the notice of adjudication, referral and response, and enforce or challenge decisions in court.

Payment disputes under construction contracts

Most construction disputes come down to money. The Construction Act, as amended in Scotland from 1 November 2011, sets out rules that apply to most building contracts:

• Payment noticesThe payer must give a notice stating the sum it considers due and how it is calculated, within the time set by the contract.
• Pay less noticesIf the payer intends to pay less than the notified sum, it must give a pay less notice in time. Without one, the notified sum must be paid in full.
• Right to suspendIf a notified sum is not paid, the payee can suspend performance after giving at least 7 days’ notice, and is entitled to extra time and costs.
• Pay when paidClauses making payment conditional on payment by someone else are generally ineffective, except where a third party is insolvent.

Getting these notices right, and on time, is often decisive. We advise on serving and challenging notices, and on recovering sums due through adjudication or court action. The UK Government’s Commercial Payments Bill, which is still before Parliament, proposes to ban retentions in construction contracts, so retention terms may change once it becomes law.

Defects, delay and termination

Defects claims require careful analysis of the contract, the specification and the expert evidence. We help employers and developers pursue claims against contractors, designers and their insurers, including claims under collateral warranties, and we defend contractors and subcontractors facing defects allegations.

Delay disputes often turn on whether an extension of time was properly applied for and granted, whether liquidate damages can be deducted, and whether the contractor can recover loss and expense. Where a relationship has broken down, we advise on the risks of terminating a building contract, which can expose a party to a large damages claim if it is done incorrectly.

Claims for defective work are usually subject to a five-year prescriptive period in Scotland, which runs from when you knew, or should have known, of the loss, its cause and who was responsible, subject to a 20-year long-stop from the date of the defective work. It is important to take advice as soon as a problem is discovered.

Dispute resolution: litigation, arbitration and mediation

We always look for the quickest and most cost effective way to resolve a construction dispute. Depending on the contract and the issues, that may be negotiation, mediation, expert determination, adjudication, arbitration or court action in the Sheriff Court or the Court of Session, which has a commercial court suited to complex construction claims. Many standard form construction contracts used in Scotland, including SBCC contracts, which are Scottish versions of JCT contracts, and NEC contracts, set out a procedure that must be followed. Disputes about public procurement of construction work have their own strict time limits, so early advice is essential. See our mediation and alternative dispute resolution page for more on the options.