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Most people will be aware of the recent problems affecting the construction industry, a major one being shortage of materials. Far from simply a temporary hiccup, the situation was already becoming an issue before being exacerbated by the pandemic and Brexit. In fact the situation is now causing possible long term changes in the industry according to lawyers.
Law firm Womble Bond Dickinson, believe that contracts within the UK may in the future be negotiated differently due to continued shortages of things like steel. In just one year disputes related to construction have more than doubled. Three quarters of people surveyed agreed that projects they were planning or working on, had been impacted by the pandemic.
Construction partner at Womble Bond Dickinson, Jessica Tresham says that if the shortage of materials is not resolved SAP, things could return to the 1980s picture. Client-contractor confrontation was all too common at that time. She stated: “Contractors and developers alike are being left in completely untenable positions because the cost of developments is varying so greatly. “Steel alone is subject to price fluctuations of up to 30% – and the cost of steel is a major proportion of many modern projects.”
“Delivering a project for the agreed cost is becoming difficult – and in some cases, where materials can’t be sourced, completely impossible. We’ve come a long way since the ’80s, when it felt as if everyone was sparring all the time, but this feels like the closest we’ve ever come to returning to that kind of environment. We talk about collaboration and flexibility when it comes to contractual negotiations, but we are seeing businesses being forced to dig their heels in. They are becoming increasingly entrenched and adversarial, because their very existence is being threatened by the complete unpredictability of these market forces.” She added: “At the start of this year we were warning people to prepare for the unexpected, and here we are. I doubt anybody could have predicted the scale of materials shortages we are now faced with.”