Tim Barrett, chair of the Construction Alliance Northeast (CAN), discusses how seemingly minor disagreements and disputes can add up in the long term
Disputes are an inevitable part of construction. Complex contracts, tight margins and ambitious schedules make the sector prone to disagreements. While multimillion-pound claims attract headlines, the real damage often comes from smaller, low-value disputes — the quiet friction points that drain time, trust and cash flow across the industry.
These disputes, usually involving sums under £50,000, might concern withheld payments, minor defects, or unapproved variations. Individually trivial, they collectively erode efficiency and relationships across thousands of projects. At a time when the UK construction industry faces rising costs and productivity pressures, tackling low-value disputes could unlock major performance gains.
What are low-value disputes?
Low-value disputes arise between contractors, subcontractors, suppliers, or clients over modest sums — often regarding:
- Delayed or disputed payments
- Minor quality or defect issues
- Change orders or variations
- Retention release
- Ambiguities in documentation
Though small in value, such disputes hit SMEs hardest. For firms operating on thin margins, even a few thousand pounds can decide whether a project is profitable.
As one construction lawyer observes: “The real volume of disputes lies in the small stuff — late payments, minor delays and small scope changes. Those are what quietly drain the industry’s resources.”
Why do they arise?
Low-value disputes rarely stem from dramatic causes, but rather they emerge from systemic weaknesses, such as:
- Poor Communication and Documentation – Verbal instructions and incomplete records make misunderstandings inevitable.
- Scope Creep – Unrecorded design tweaks or client requests accumulate and lead to entitlement disputes.
- Delayed Payments – Even small delays can trigger cash-flow crises for subcontractors.
- Ambiguous Contract Terms – Over-amended contracts introduce uncertainty; when values are low, legal advice may cost more than the claim.
- Minor Defects and Rectification Costs – Small defects become symbolic of broader trust issues.
The disproportionate damage
Though values are low, the consequences can be large. A small variation dispute can stall approvals and disrupt schedules, causing project delays, for example. Issues can also arise with cash flow, as withheld payments can halt progress for a subcontractor.
There is also an administrative burden to consider when teams spend more time documenting and arguing than building, and this can lead to strained relationships. Small disputes, therefore, risk souring long-term partnerships in a relationship-driven industry.
This, in turn, can lead to reputational risk. Companies can become known for combative or slow-payment behaviours, and can struggle to attract quality partners.
And finally, there is a systemic burden, as escalating small disputes can clog adjudication and legal systems with disproportionate costs.
Finding a better way
Reducing low-value disputes demands both cultural and procedural reform. Prevention, transparency and proportionate resolution are key. This includes clear and detailed contracting, where the scope, payments, and variation procedures are defined clearly. Use plain English and avoid excessive amendments to NEC or JCT contracts.
Proactive communication, i.e., documenting verbal agreements in real-time, is another must. Digital project tools can make record-keeping simpler and more reliable.
Practicing real-time variation management will also help to minimise conflicts, keeping price and approving variations contemporaneously to avoid disputes at final accounting.
And if needed, fast-track adjudication by expanding the use of the CIC’s low-value adjudication procedure for quick, proportionate resolutions. One can also consider Alternative Dispute Resolution (ADR), such as mediation or expert determination, which offer low-cost, informal solutions. Mandatory ADR clauses for small disputes could prevent escalation.
Fair payment and retention practices, including prompt payment schemes, project bank accounts, and trust-based retention systems, will protect cash flow and build trust. Meanwhile, digital record-keeping, such as centralised digital platforms, will help teams log instructions, variations, and payments, reducing reliance on memory or paper.
The role of industry and policy
System-level changes can mitigate the impact of minor disputes, such as:
- Enforcing Prompt Payment: Stronger regulations, like models in Australia and New Zealand, would cut one of the biggest causes of conflict.
- Creating Small-Claims Construction Tribunals: A fast, low-cost forum could resolve minor disputes without legal representation.
- Improving Training: Education in contract management, documentation, and dispute avoidance would equip teams to prevent issues early.
- Promoting Standard Contracts: Wider adoption of NEC, JCT, FIDIC and FMB Domestic forms ensures clarity and consistency.
- Boosting CIC LVD MAP Awareness: Despite its promise, the scheme remains underused. Institutional backing and awareness could make it the default route for small disputes.
A cultural challenge
Low-value disputes reflect the industry’s adversarial culture, where blame too often outweighs collaboration. Yet change is possible. Over the past decade, construction has embraced digitalisation and sustainability; a similar transformation in dispute management could bring equally profound benefits.
The cost of conflict in construction is not just money; it’s also time, relationships, and trust. Fixing low-value disputes is about fixing the culture.
Looking ahead
As the UK construction sector faces growing demand and tighter margins, efficiency and collaboration are more vital than ever. Low-value disputes may not make headlines, but collectively they undermine these goals — eroding confidence, delaying payments and diverting focus from delivery to disagreement.
The tools for change already exist, such as the CIC’s adjudication model, prompt payment codes and digital transparency systems. What’s needed now is adoption, consistency, and a shared commitment to fair and early resolution.
Low-value disputes may appear minor in a billion-pound industry, but their cumulative cost in terms of money, time, and goodwill is vast. By resolving small issues quickly and fairly, the sector can improve productivity, strengthen supply chains and foster a more collaborative culture.
We’ll never eliminate conflict completely, but if we prevent small issues from escalating into big problems, we’ll save the industry millions — and a lot of unnecessary stress.
The post The hidden costs of small conflicts in construction appeared first on Planning, Building & Construction Today.
