Smaller, newer firms still vulnerable to contract disputes due to lack of awareness, says leading construction lawyer
Gulf-based contractors are still vulnerable to contract disputes and have not fully absorbed the lessons of the Dubai property crash, a leading construction lawyer has warned.
The rapid turnover of employees during and after the collapse of the real-estate market is still having a painful effect on the industry, said Scott Lambert, the new regional head of construction and infrastructure at Al Tamimi & Company, the region’s largest law firm.
Lambert warned that small and medium-sized contractors may not have fully absorbed the lessons of the collapse of the Dubai real estate market, in which house prices tumbled by more than 50 percent and numerous projects were delayed or cancelled.
“Institutionalised businesses have learnt lessons and will be more cautious, however I think those that have come to the industry more recently are less likely to remember the bad times, and so lessons may not have been learnt,” he told Big Project ME.
Lambert said there is a dire need for contractors to have access to the right legal advice to ensure their protection during contractual disputes.
Part of his job is to increase awareness about the legal pitfalls that await contractors in the GCC if they do not take adequate measures to protect themselves when drawing up contracts.
“I think spending a bit of money up front saves you the hassle of a big arbitration down the track. It is important that contractors get legal advice upfront and legal guidance on what they’re signing, or on their contract admin procedures as they go along, just to save them an arbitration, or to give them the right strategy to strengthen their position,” he said.
“Contractors need to continue to focus on the contracts that they enter into and the subcontracts that they write and their contract administration. Normally it takes one good litigation for a contractor to realise that ‘yes, we need to start spending some money at the start of the project’.”
To this end, Lambert intends to run a series of seminars in 2015, to highlight the issues faced by contractors in the region and how the right legal guidance can avoid problems down the line.