Where commercialpositions weaken.
Research from the Chartered Institute of Building, the Association for Project Management, universities and courts identifies decisions through which commercial positions can weaken: agreeing risk, assessing change, controlling payment, substantiating delay, closing accounts, choosing escalation and preparing for resolution. Legalbuild examines how judgement and evidence preserve entitlement across contractor portfolios.
Explore the researchCommercial strengthdepends on connectedjudgement.
APM’s 2025/26 Business Leader Index recorded that only 20% of construction leaders expressed confidence in project delivery in January 2026. CIOB’s Skills Gap Index, published in June 2025, identified weaknesses in contract understanding, dispute avoidance and programming. Together, these findings place uncertainty about delivery alongside capabilities needed to assess and protect commercial positions.
The greater commercial vulnerability arises when contractual obligations, developing events and recovery decisions are considered in isolation. Risk accepted at agreement can surface during delivery; untested change can complicate valuation; settlement can proceed without an established alternative. Connected specialist judgement is most valuable while obligations can be interpreted, evidence secured and commercial choices preserved.
“Confidence is strengthened when directors can connect contractual responsibility, live evidence and credible recovery options before commercial choices narrow.”
The risk accepted can exceed the risk understood.
Commercial protection depends on methodical interpretation of the whole agreement, not a favourable statement read in isolation.
The risk accepted can exceed the risk understood.
CIOB’s 2025 Skills Gap Index found that 29% of 2,556 respondents perceived substantial gaps in understanding building contracts and codes; interviews also identified disconnects between bid and delivery teams. In Workman Properties Ltd v ADI Building and Refurbishment Ltd [2024] EWHC 2627 (TCC), ADI relied on statements in the Employer’s Requirements that design had reached RIBA Stage 4. The first adjudicator accepted ADI’s interpretation that these statements amounted to an employer warranty, capable of supporting claims arising from incomplete design.
The Technology and Construction Court reached the opposite conclusion on the warranty. Reading the amended JCT provisions and Employer’s Requirements together, it held that ADI was responsible for checking the inherited design and completing it to Stage 4. The first adjudicator’s interpretation was therefore wrong on this contractual point: a revealing demonstration of why apparently clear statements require methodical analysis against the entire agreement. Contractors must reconcile bespoke amendments, incorporated documents, design obligations and tender assumptions before commitment, rather than price on protection the executed contract does not provide.
“The risk accepted may exceed the risk understood when a favourable contract statement is read without its wider obligations.”
The work changes. Entitlement still needs proof.
of construction professionals identified uncontrolled changes in project scope as a major cause of commercial instability and disputes.
Operational change has commercial value only to the extent that the contract and evidence support it.
Recognised change is not yet a tested entitlement.
NEC Contracts’ 2026 survey of more than 1,000 professionals across five countries identified uncontrolled scope change (39%) among the leading sources of supply-chain instability. Separately, a 2026 peer-reviewed UK study of businesses adopting modern methods of construction identified approval delays, rework and cost discrepancies associated with variations. Together, these findings connect changing work with operational disruption and the contractual task of establishing its scope, programme effect and valuation consequences.
An instruction changing the works does not itself establish entitlement, programme impact or the value of additional work. Deferring assessment until final account can sever the connection between instructions, labour records and contemporaneous programme evidence. Material changes therefore require early contractual classification, timely notices and valuation: identify the governing mechanism, establish causation, measure actual cost and preserve supporting records while the affected work is still being performed.
“The commercial value of a change depends on establishing its scope, programme effect and cost while the work proceeds.”
Payment now and valuation later are separate tests.
sumWhat must be paid now
valuationWhat the work is worth
Liquidity exposure follows enforceable payment obligations, even while substantive value remains disputed.
The notice sequence can change commercial leverage.
In S&T (UK) Ltd v Grove Developments Ltd [2018] EWCA Civ 2448, the Court of Appeal confirmed that notified-sum payment precedes a payer’s true-value adjudication. In FK Construction Ltd v ISG Retail Ltd [2023] EWHC 1042 (TCC), a £1.69 million payment award remained enforceable despite other adjudication decisions. VMA Services Ltd v Project One London Ltd [2025] EWHC 1815 (TCC) likewise enforced a notified-sum award before the payer could pursue a valuation challenge.
Following payment, Project One London Ltd v VMA Services Ltd [2025] EWHC 3304 (TCC) enforced a £102,657 repayment after a true-value adjudication of the same interim application. The initial £106,435 payment due and later repayment describe different measures, not final valuations. Contractors must maintain parallel assessments of enforceable payment and substantiated value, rather than confuse cash-flow entitlement with the final account. The distinction affects liquidity, recovery decisions and commercial leverage.
“A payment decision can establish what must be paid without establishing what is ultimately recoverable.”
Delay claims become harder to establish when analysis is deferred.
delivery
completion
Agreed that delay claims were commonly left until near or after completion; not a measured proportion of claims.
Programme slippage must be translated into proven causation before time or money can be recovered.
Delay requires proof of its cause.
In a 2013 UK survey of 130 practitioners, Brunel University researchers found that approximately 75% of contractor respondents and 69% of consultants agreed that delay claims were commonly left until near completion or afterwards. Robert Gordon University’s 2026 review of 21 contested extension-of-time assessments found that disputed analytical methods, selective records and subjective assumptions could drive disagreement. Together, these studies show why late assessment and methodological weakness can undermine otherwise substantial delay claims.
Evidence of programme slippage is not itself an entitlement to time or money. Contractors must promptly identify causative events, analyse critical-path effects, test concurrency against reliable contemporaneous progress records and establish precisely the relief permitted by the relevant contract. The Robert Gordon University cases show that disputed methodology can materially undermine an assessment even where records exist. Commercial control requires programme analysis and factual records to be reviewed during delivery, with time entitlement and compensation tested separately, alongside mitigation decisions and related subcontract liabilities.
“A delayed programme may justify additional time; recovering money requires separate proof of contractual entitlement and loss.”
The dispute categories are distinct, but the record must reconcile.
sums
expense
final account
Reconciliation at closeout can test an established account; it cannot replace missing delivery records.
The last valuation cannot rebuild the record.
RIBA’s 2022 survey of more than 950 construction professionals identified final-account valuation as an issue for 30% of respondents reporting disputes; variation valuation was cited by 26% and loss and expense by 31%. RICS’ final-account practice information, reissued in October 2024, addresses the preparation, agreement and negotiation of the final account. Taken together, these sources show that closing the account requires separate contractual entitlements, valuation adjustments and supporting evidence developed during the course of the works.
At closeout, directors must distinguish account components by their contractual and evidential basis. Certified sums, variations, loss and expense and disputed claims require reconciliation against instructions, assessments and cost records. This reconciliation belongs throughout delivery, with material evidential gaps identified and addressed before demobilisation. The final account then tests what the contractor can establish, rather than reconstructing lost evidence or treating a forecast as recovery.
“The final account should reconcile positions established during delivery, not become the first attempt to establish them.”
A negotiated outcome is not evidence of weakness.
commercial positionEntitlement · Evidence · Exposure
Both options should be assessed before deciding how to proceed.
Commercial judgement is stronger when negotiation and enforceable alternatives are assessed together.
Negotiation and preparation are not opposing choices.
RIBA’s 2022 construction-contracts survey recorded board-level negotiation as a specified procedure in 34% of disputed projects or contracts; 44% of reported disputes had settled. CIOB’s 2024 roundtables with Welsh construction SMEs described businesses reluctant or unable to pursue litigation because of cost, limited resources and the need to secure future work. Those accounts explain why enforcement may be difficult without establishing that negotiated settlements systematically fall below contractual entitlement.
Preserving customer relationships can justify compromise, even where entitlement is strong. Exposure arises when limited resources or enforcement costs dictate the outcome before facts, counterclaims and adjudication alternatives are assessed. The objective is not more proceedings, but the preservation of informed choice. Directors should know the strength of the case, pursuit costs and the point beyond which settlement reflects a lack of prepared options rather than informed commercial judgement.
“A decision to avoid proceedings should be informed by the strength of the position, not uncertainty about it.”
The evidential position must survive the handover.
Based on 165 survey responses; participants could select more than one perceived cause of adjudicated disputes.
Specialist scrutiny should refine the established case, not start the evidential reconstruction.
Recovery readiness begins before formal proceedings.
King’s College London’s 2024 survey of adjudication participants identified inadequate contract administration (50%) and lack of competence among project participants (42%) as leading perceived causes of construction disputes. RICS’ 2025 early-intervention guidance calls for emerging issues to be identified promptly, diagnosed and examined with independent expertise. The survey records perceived causes rather than demonstrated effects of advisory continuity; the commercial interpretation is that early intervention supports an established evidential position through independent specialist assessment.
Escalation judgement concerns whether to negotiate or pursue a remedy; resolution continuity concerns what happens to the claim once that decision is made. Contractual grounds, notices, correspondence, programme analyses, valuations and counterclaims should form an intelligible record capable of independent scrutiny. Accordingly, the established commercial position should travel coherently into subsequent specialist assessment, adjudication or defence, with analysis tested and refined rather than reconstructed. That continuity protects the quality of decision-making across the transition, not a predetermined result.
“Resolution readiness means carrying a tested contractual and evidential position into specialist scrutiny, not rebuilding the case after escalation.”
A position is protectedthrough the decisionsmade while it develops.
Seven decisions shape exposure. The signed agreement allocates risk; changes require assessed entitlement; payment notices affect immediate liability; delay claims depend on causation; final accounts require substantiated records; settlement requires tested alternatives; and resolution demands a coherent claim. CIOB’s capability findings and APM’s delivery-confidence research provide context. Their common thread is the need to interpret obligations, test developing evidence and act while meaningful commercial options remain.
The commercial judgement is that weakness often emerges between these decisions, rather than within a notice, valuation or dispute. Contractual allocation must be understood at commitment and carried into mobilisation. During delivery, instructions, records, programme effects and cost assessments must remain connected. When differences harden, the same tested material should inform negotiation and, where appropriate, independent assessment or adjudication. Across portfolios, leadership must identify which positions warrant earlier specialist action before evidence, time or remedies constrain the response.
Legalbuild works alongside contractor teams to preserve continuity through agreement, delivery, closeout and recovery. The objective is not more disputes or an alternative commercial forecast. It is informed choice: recognising which entitlements have supporting evidence, which exposures require intervention and which disagreements justify compromise. A contractor’s position is stronger when leadership can explain its contractual basis and progress the same material into resolution without losing the judgement already established.
“A stronger commercial position is built throughaligned contractual decisions, disciplined live recordsand informed recovery choices across the portfolio.”