The cost of construction disputes in the Middle East

Earlier this year, global design consultancy firm Arcadis issued its Global Construction Disputes Report. The report has generated discussion in the region, noting that the Middle East now heads the list for the average value of disputes ($82m), swapping places with Asia ($67m). While in this article I offer some observations on the figures, I had no involvement in their collation.

It is to the credit of those who conduct dispute resolution in the Middle East that, on these figures, they do not head the list so far as the average length of dispute is concerned. In that regard, the average period taken between the formalisation of a dispute under the contract and the time of settlement or conclusion of the hearing, the Middle East ranks third of the five regions identified, the balance of which are North America, the UK and Continental Europe. With an average of 15.2 months, the resolution of disputes is significantly faster than in Asia (19.5 months) and beats the stated global average of 15.5 months.

Allied with discussion about the increase in value of disputes, it has been suggested that the cost of resolving those disputes is similarly increasing. This article considers those issues and offers suggestions as to why this might be the case.