A dispute during construction and need a quick decision? What does the "legal toolbox" offer?

The moment a contractor comes to me with the message that his client is not paying, I like to explain what options the "legal toolbox" offers. It is then a matter of finding a remedy that fits the ailment well.

The ailment and the remedy

If, in the contractor's view, deadlines are wrongly not paid, or, for example, an additional work order that is crucial to the progress of the construction is not issued, a contractor is quick to consider suspending the work. Or just continuing in the hope that it will all work out. Suspension of work, however, can be a dangerous remedy, because stopping a construction project irrevocably leads to damages, and if the suspension later proves to be unjustified, the contractor is liable for those damages. Waiting is also not always wise, because a client can go bankrupt, for example, but also because during construction, there are still means of exerting pressure, and consulting afterwards often leads to "giving away.

Starting a procedure

One solution that is relatively little used - but can certainly make sense - is to initiate proceedings during the construction process. I am of course aware that this will put the relationship on edge, but so does suspending work, invoking a lien, etc. Proceedings, on the other hand, better safeguard mutual interests (progress of the construction process, mitigation of damages). However, proceedings on the merits can easily take a year to two years and thus is not an avenue to get a quick decision, but the civil courts and the Council of Arbitration have emergency procedures that can provide a solution.

Civil court summary proceedings

The Provisional Judge may grant injunctive relief, such as imposing an injunction or prohibition, but may also grant an advance on a claim. This is subject to three conditions:

1. the claim must be "hard", meaning that the Provisional Judge estimates that the claim will also be awarded in proceedings on the merits;
2. there must be an urgent interest, or liquidity need, for example to continue to pre-finance projects as a contractor;
3. the restitution risk must not be such that if the claim is granted, the claimant is unlikely to be able to repay.

By no means all cases lend themselves to summary proceedings. First, because the mere fact that a major project risk is run does not mean that an urgent business risk is immediately at issue and, second, because a decision in principle (for example, "right to additional work or not" and "term due or not") may be necessary and a preliminary injunction then does not move the parties forward.

The Council of Arbitration

The Board of Arbitration also has summary proceedings, fairly similar to those in the civil courts. The Council of Arbitration also has what is known as an 'emergency floor procedure'. Via an emergency floor procedure, in which fast-track proceedings with very short deadlines are possible, a decision in principle is possible and therefore does not remain at a mere preliminary injunction. Moreover, although the urgent interest must be made plausible in an emergency court procedure, the bar is relevantly lower than in summary proceedings in civil summary proceedings. In other words, the desired urgent decision is possible without the disadvantages associated with summary proceedings.

Initiate preferred procedure

As a contractor, you unfortunately cannot always choose where to litigate. Many clients tend to set aside standard terms and conditions such as the UAV and UAV-GC when it comes to the jurisdiction of the Board of Arbitration and opt for the civil courts for reasons of their own. In practice, once the dispute has arisen, it is hard to find a client who is still willing to agree to declare the Council of Arbitration competent.

So my first tip is to declare the Council of Arbitration competent - where possible - in the construction contract, at least not to deviate from the standard terms and conditions. The second tip is to raise the alarm in the event of disputes during the construction process and examine the contents of the "legal toolbox" in a timely manner.