Christopher (Chris) S. Dunn, Member of the Firm, in the Health Care & Life Sciences practice, in the firm’s Nashville office, was quoted in Construction Dive, in “The Dotted Line: Cost Escalations Lead to More Disputes,” by Joe Bousquin.

Following is an excerpt:

As inflation grabs headlines and causes sweaty brows, construction input prices have risen even more, up 13% year over year, significantly higher than the overall 8% inflation rate. 

Now those price hikes are causing another kind of increase. Attorneys say the number of disputes between contractors, subs and owners over who should bear the higher costs is also growing. …

Moving forward without litigation

Not all lawyers say disputes are on the rise.

Chris Dunn, a construction lawyer in the Nashville office of Epstein Becker & Green who represents owners on healthcare projects, said owners have surprised him with their willingness to absorb costs.

“Decision makers for owners are buying bread and milk and fuel, and they can see diesel at $5 a gallon,” Dunn said. “So it’s undeniable there’s been a very sharp increase in prices everywhere.”

As a result, some owners and GCs resolve issues after inking the deal.

“At least for those with healthy relationships, I think the owners and contractors have pulled together to figure out ways to move forward,” Dunn said.

Some of those ways could mean leaning on contingency clauses that are included in most contracts and cover a wide range of unforeseeable events. Allowances for specific materials or phases of a project that could experience cost overruns, which are nonetheless capped at a certain amount to protect the owner, have been used as well.

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