Pre-empting conflict
Over the last decade, there have been increasing efforts within the industry to address potential points of conflict before or as they arise. This is largely thought to be more prudent than allowing tensions to escalate or to address multiple areas of dispute at the end of the contract. Consolidating disputes and addressing them later in the process is often more time consuming, emotionally charged and expensive than addressing each issue consecutively.
COVID-19 has of course become a complicating factor, with employers and their counterparts often adopting a ‘wait and see’ mentality in the hope that economic, political and regulatory uncertainty will diminish as the situation evolves.
Despite this, 74% of our survey respondents indicated that they would always or often seek to resolve issues separately during the course of a project. This is only slightly lower than the 76% of survey participants that provided the same answer in 2020.
Equally, our respondents are clear that engaging the internal legal or contract management team, along with external counsel, at the outset of a project, is shrewd in addressing areas of risk and to have the necessary strategies in place. This is especially true during the COVID-19 pandemic as contract management teams have become stretched in dealing with the sheer number of raised notices. New government policies and changes in the regulatory landscape have further accentuated the importance of obtaining internal and external guidance on contract terms and potential areas of risk.
A large 51% of survey respondents will often or always consult the internal legal/contract management team or external counsel at the outset of the project to identify areas of risk and put in place strategies to manage them. This is only slightly down on the 56% figure in the 2020 survey and must be explained by the uncertainty and ‘wait and see’ approach caused by the COVID-19 crisis. Another 40% of survey participants will sometimes take this approach, with the remaining 9% never taking this approach.
As the project progresses, our survey respondents also believe in spending small amounts on legal advice to ensure that it progresses as smoothly as possible. Our data shows that responses are in line with 2020. Out of 55 responses, 42 were in favour of the approach, only three disagreed, while another 10 believed that it was appropriate in some or most circumstances.
