Significant causes of claims and disputes in construction projects in Saudi Arabia

Projects in the construction industry have been confronted with an unprecedented volume of claims, which negatively impact the construction business environment. The purpose of this paper is to identify and assess the major causes of claims and disputes, from the perspectives of three key stakeholders.

An online and paper-based questionnaire was distributed to a random sample of 250 professionals. Responses from 86 construction professionals were obtained. The significance index was employed to rank the factors and hence assess their relative significance. Results were analyzed from both the individual stakeholder, and collective perspectives. Test of agreement was also conducted.

The research found the following causes to be the most significant contributors to claims and disputes in Saudi Arabia: “change or variation orders due to new requirements from client” (78 percent), “variations in quantities due to new requirements from client” (74 percent), “delay caused by contractor” (74 percent), “design errors or omissions” (72 percent) and “inconsistencies in the drawings and specifications” (70 percent).

The research provides an in-depth assessment of the causes of claims and disputes, in the setting of a fast growing industry, in which strong performance is essential to continued success. Unlike several of the reviewed studies which reported “delay caused by the owner” or “delayed in payment” as a major cause of claims and/or disputes, the findings of the current study indicated that this cause was not the most significant. Instead, it was determined that the top causes of claims and disputes were attributed to all parties, including consultants, contractors and clients.