PlanRadar, a leading digital field management platform for the construction and real estate industries, has published the results from extensive studies showing how digital solutions can significantly improve claims management on construction projects. Disputes are a pervasive problem in North America, representing a major drain on resources and costing building firms tens-of-millions of dollars annually.

Investors, project managers, engineers, consultants, general contractors, and subcontractors routinely face conflicts arising from changes in scope, mismatched expectations, delays, defective work, and other issues. Research has found that misunderstandings among stakeholders can delay job completion by up to 30% and necessitate expensive remedial action costing 11% of the project’s total budget on average. Moreover, claims often morph into full-blown legal challenges which typically last over a year and cause huge inconvenience for all parties involved. 

The most common causes of construction disputes in the US include incomplete documentation, change requests for ongoing projects, improper scheduling of building work, and poor coordination between project stakeholders. Research by PlanRadar indicates that America’s construction claims crisis is also being driven in part by the sheer volume of documentation required at each project stage, as well as difficulties with deadline monitoring and hindrances to timely and effective communication. 

The best way to address construction and real estate claims is to proactively manage the issues underlying them. This includes:

• Clearly defining the scope of work. Before work begins, the owner and contractor should clearly define and outline the scope of work in writing. This will help to avoid disputes about what tasks are included in the contract.
• Communicating effectively. It is important for all parties to communicate effectively throughout the project. This includes keeping each other informed of any changes in expectations or delays that may occur. 
• Documenting everything. It is important to document all aspects of the project, including alterations to the agreed plan, obstacles to the timely completion of work, and any other issues that arise. The digitization of permits, plans, agreements, contracts, and reports can also help in the handling of claims, and the prevention of problems from emerging in the first place.

PlanRadar can help construction and real estate companies improve claims management by empowering them to:

• Track changes to plans and specifications. With PlanRadar, construction activities can be photographed, video recorded, and marked on 2D plans or BIM models, making it easy to identify and track changes. Critical project paperwork can also be digitized and stored on a centralized platform, making it far more accessible. 
• Monitor deadlines. Create diagrams, including Gantt charts, directly in PlanRadar to dynamically monitor each project phase and identify possible complications to the construction process.
• Establish communications trails. PlanRadar provides a single digital platform where voice messages, photos, videos, text messages, and communication history are easily accessible and archived for reference. This maintains a high level of transparency which is useful in the event of a complaint — especially if the dispute precipitates a court proceeding.

“Through extensive research, dialogue with our customers, and experience in the construction space, it’s clear that one of the most high-stakes situations for all parties involved in a construction project is the handling of complaints,” said Sander Van de Rijdt, Co-Founder and Co-CEO at PlanRadar. “That’s why PlanRadar is engineered with capabilities enabling users to get ahead of problems before they trigger more serious disputes. The most effective way to handle claims is to avoid them in the first place.”