Denmark
Answer ... Under the AB Standards, the relevant forum for disputes is the Danish Building and Construction Arbitration Board, an arbitral body that specialises in construction disputes. The Arbitration Board handles about 400 arbitration cases and over 1,000 requests for expert opinions a year.
Construction disputes are also sometimes heard by the public courts, if arbitration has not been agreed upon. However, this is more the exception than the rule.
Denmark
Answer ... The issues that such disputes involve vary greatly.
Typical issues may include:
- whether a contractor is entitled to an extension of time and compensation related thereto; or
- whether a certain work is considered defective.
In the coming years, we expect to see several cases involving the question of whether the employer or the contractor bears the temporal and economic risks arising from COVID-19 related delays and costs.
Denmark
Answer ... Most disputes are customarily resolved between the parties before reaching arbitration or other dispute resolution forums – often through escalation of the dispute to senior levels of management among the parties.
Denmark
Answer ... The use of alternative dispute resolution is an integrated part of the AB Standards, with the so-called ‘dispute resolution ladder’ and provisions on mediation and conciliation.
According to the dispute resolution ladder, efforts must first be made to resolve and settle a dispute between the parties through negotiations between the project managers; if this proves unsuccessful, the management representatives must seek to settle the dispute by negotiations.
Mediation, conciliation, speedy resolution or arbitration cannot be initiated before this negotiation procedure has taken place.
The AB Standards also include provisions on mediation and conciliation, which must take place if either party so requests.
In addition to a usual expert appraisal, the AB Standards allow for a decision on the security provided if requested by either party. This mechanism is an attempt to swiftly resolve questions relating to the security provided by the contractor or employer. Accordingly, there is a 10-working-day deadline for the expert to decide to what extent a claim should be allowed after receiving the last pleading and any supplementary information.
Finally, the AB Standards include a provision on speedy resolution. This procedure may be initiated with regard to certain disputes, including:
- questions relating to the client’s right to order a variation;
- disputes over the adjustment of the contract sum;
- disputes with a monetary value of less than DKK 200,000; or
- if otherwise agreed between the parties.
However, in practice, the use of these alternative dispute resolution mechanisms is not as common as it could be.
Denmark
Answer ... Dispute review boards are not part of the AB Standards and are not commonly used.
However, in larger construction projects, dispute review boards are sometimes agreed upon.
Members of the dispute review board are typically appointed by the parties, and the dispute review board may provide (initially non-binding) suggestions and recommendations to the parties.
Denmark
Answer ... In recent years, a number of cases have concerned the use of so-called ‘MgO boards’ (wind barriers). A couple of years ago, it emerged that such boards are not suitable for the Danish climate and thus need to be replaced.
The question in the cases has mainly been whether the use of MgO boards could be considered as development damage, as a result of which the contractor installing them and the consultant choosing them would be free from liability towards the employer. In Danish construction law, this assessment depends mainly on the knowledge in the industry at the time of construction, including whether the material was considered to accord with good practice at the time.