Perspective

Conflict Management

How do you handle a construction project that isn’t going to plan? Like the ostrich or...?

Written by

Joachim Riis Jensen

Attorney-at-law

Published

9 September 2026

A construction project rarely goes to plan. In fact, it is more the rule than the exception that budgets and schedules on larger building and civil engineering projects are exceeded.

Studies suggest that 9 out of 10 larger projects exceed either the expected price or the expected time. But what do you do to get the project back on track?

There can be many reasons for overruns and delays, and they may be rooted very early in the project. We have repeatedly seen a situation where the design consultant has to send project documents to the precast element supplier, which then has to manufacture elements for the building. Because of time pressure, however, the design consultant has not drawn all the holes that need to be in the elements into the 3D model sent to the element supplier. This is only discovered after the elements have been installed in the building, so the holes then have to be drilled in the elements already installed. The construction project consequently becomes more expensive and is delayed as a result of the “minor” deficiency in the design.

Managing the contract – contract management

It is not unusual for a discussion to arise afterwards about who should pay for the extra costs and the delay. It can sometimes be a difficult and unpleasant task to deal with who should pay for the loss the client has suffered. As a result, the client or the client’s consultants sometimes fail to give notice (correctly or in time) of the deficient work to the design consultant or contractor in accordance with the contract and the set of rules governing it. In other words, the conflict is “saved” for later in line with the so-called “ostrich strategy”.

Playing down the conflict or saving it for later does, however, have a number of consequences. The most obvious is that the client risks losing its claim or having it reduced. Worse still, the client’s passivity may mean that an arbitral tribunal or court attaches importance to the lack of reaction. In some cases, the lack of management has led the arbitral tribunal to reject any claim for liquidated damages or compensation made by the client. Case law and arbitral practice are full of decisions in which the tribunal attaches decisive importance to the parties’ conduct.

Manage by the contract before circumstances manage your project

One of the levers the client can very obviously benefit from is to take a position on extra costs and delays and give notice in accordance with the contract, e.g. as described in AB 18 and FIDIC. This also makes it clearer where the parties stand on the delay or the extra costs. Both AB 18 and FIDIC have very clear rules on the duty to give notice.

Contractual handling of delays and extra costs – disagree professionally

Another advantage of raising claims early is that the parties can agree on how to resolve extra costs and delays. For example, acceleration can be agreed, with the outcome of any subsequent case deciding the payment for the acceleration. In this way, any claims for damages are reduced. Handling claims earlier may also make it possible to agree on optimizing the project and thereby reducing costs.

Expedited decisions

If the parties cannot agree, there is still the possibility of finding solutions with the help of a third party. Quite obviously, the various alternative dispute resolution tools such as mediation and conciliation can be used. Some standard construction contracts (e.g. AB 18, ABR 18 and ABT 18) include an option to have a dispute decided quickly.

What do you do if the project has gone completely off the rails?

Sometimes the challenges are so great that individual issues can no longer be resolved. There may be fundamental challenges in the design, the planning or the collaboration. In such serious cases, a fundamental understanding of why the project has gone off the rails is crucial – a thorough analysis. After that, it may be necessary to look at how the project can be completed and, if necessary, start afresh on the matters that keep obstructing the project.

Prevention is always better than cure – but how?

There is no doubt that some projects are created on an incomplete basis and with excessive confidence that the project will go to plan. If you recognize that your project carries a risk of delays and extra costs, it may be a good idea to talk to us about how your next project can benefit from our experience with integrated construction, where there is a structured focus from the outset on keeping to budget, time and quality.