The Collaboration Paradox: Reconciling Contract and Conduct in UK Construction
- Martin Perks
- Aug 16
- 13 min read
Updated: Oct 26
Introduction: Our Industry's Cognitive Dissonance
The UK infrastructure construction sector is in a state of profound cognitive dissonance. On one hand, it has invested heavily in sophisticated, modern contracts explicitly designed to foster collaboration. On the other, it remains trapped in a commercial model that systemically rewards adversarial behaviour. This is the industry's central paradox: we champion the language of partnership while perpetuating a culture of conflict. We hold two contradictory beliefs simultaneously: that we must collaborate to succeed, and that we must protect our commercial interests at all costs, even when the latter directly undermines the former.
This contradiction is most clearly embodied in the widespread adoption of the New Engineering Contract (NEC) suite. Introduced to stimulate good management and foster a "spirit of mutual trust and co-operation," NEC contracts were intended to move the industry beyond its litigious past (Arbicon, 2025; Coniston Associates, 2022). Clause 10, in its various iterations, is not a mere platitude; it is a binding contractual obligation intended to ensure projects are successful for the benefit of all parties (Coniston Associates, n.d.). Yet, this contractual ideal collides with a harsh reality. The industry is still widely described as historically and currently adversarial, a place where conflict, hostility, and litigation are commonplace (Bishop. et. al. 2019; JCT Ltd, 2022). The Confederation of British Industry (CBI) delivered a stark assessment, concluding that the construction business model is simply "not fit for purpose," crippled by "adversarial behaviours built up over many decades" (CBI, 2020).
The industry's embrace of collaborative language without a corresponding reform of its underlying commercial model has created the appearance of progress while leaving the root causes of conflict intact. Adopting a new contract form is a relatively straightforward, transactional change. Fundamentally altering a commercial model that dictates risk allocation, profit margins, and corporate survival is a deep, structural, and far more challenging transformation. The industry has, by and large, opted for the former without fully committing to the latter. This allows parties to claim allegiance to collaboration while continuing to act out of commercial self-preservation, fuelling the very dissonance this report will explore.
This analysis posits that this paradox is not the result of the moral failings of individuals, but the logical and predictable outcome of a dysfunctional system. This report will first examine the chasm between the contractual intent for collaboration and the statistical reality of on-the-ground conflict. It will then dissect the systemic pressures on clients, contractors, and the supply chain that create this architecture of adversarialism. Subsequently, it will quantify the devastating but often unseen human cost of this commercial conflict. Finally, it will explore structural pathways, such as the Project 13 enterprise model, that offer a route towards genuine alignment between contract and conduct.
The Chasm Between Intent and Action
The gap between the industry's stated goals and its actual outcomes is not a matter of perception; it is a quantifiable reality. A detailed examination of the legal framework reveals a clear and strengthening mandate for collaboration, yet the industry's own data paints a picture of endemic and escalating conflict.
The Legal Mandate for Collaboration
Modern construction contracts, particularly the NEC suite, have moved decisively to codify collaboration as a core obligation. The requirement in NEC contracts for parties to act "in a spirit of mutual trust and co-operation" is far more than an "avowal of aspiration" (BCLP, 2024.). The courts have made it increasingly clear that this is a binding duty and that failure to comply can result in legal sanctions (Coniston Associates, 2022).
This principle has been progressively reinforced. In the transition from the NEC3 to the NEC4 form of contract, the obligation was separated from the general duty to act as stated in the contract and given its own clause (10.2), a move designed to highlight its standalone importance (Coniston Associates, n.d.; BCLP, 2024.). Legal jurisprudence has further strengthened this duty, with courts equating the NEC wording with the broader principle of "good faith" (BCLP, 2024.). In the landmark Scottish case of Van Oord UK Ltd v. Dragados UK Ltd, the court was unequivocal, stating that Clause 10.1 "reflects and reinforces the general principle of good faith in contract" (BCLP, 2024).
This judicial interpretation is significant. While English law has traditionally been hesitant to imply a general duty of good faith into all commercial contracts, its explicit inclusion and reinforcement in standard forms like NEC signifies a move away from a purely adversarial legal interpretation (BCLP, 2024). It is important to note that this duty does not compel a party to abandon its own commercial self-interest or give up a "freely negotiated financial advantage" (BCLP, 2024). However, it does impose a standard of conduct that requires honesty, transparency, and fair dealing, prohibiting actions that are arbitrary or commercially unacceptable without proper justification.
The Statistical Reality of Conflict
Despite this clear legal and contractual direction, the empirical data reveals an industry mired in disputes. The scale of this conflict is not only persistent but, in terms of financial impact, is worsening dramatically.
A 2021 report from the consultancy Arcadis found that the average value of a construction dispute in the UK surged by an astonishing 117% in a single year, rising to £27.7 million in 2020 from £12.8 million in 2019 (Arcadis, 2021). This indicates that when disagreements occur, they are becoming significantly more costly to resolve. The frequency of disputes also remains stubbornly high. A report by the Royal Institute of British Architects (RIBA) found that one in four construction projects in 2021 experienced at least one dispute during its lifecycle (RIBA, 2022).
The sheer volume of formal conflict is captured in the latest data on adjudication, the industry's primary dispute resolution mechanism. A 2024 report from King's College London revealed a record high of 2,264 adjudication referrals in the preceding year, continuing a clear upward trend (King's College London, 2024). Perhaps the most damning finding from these reports, however, is the root cause of this conflict. The disputes are not primarily driven by unforeseeable technical complexities or novel engineering challenges. Instead, the number one cause is consistently identified as a fundamental failure of process and behaviour: "parties failing to understand and/or comply with their contractual obligations," coupled with "inadequate contract administration" (Arcadis, 2021; King's College London, 2024; Addleshaw Goddard, 2020).
This data reveals a critical disconnect. The legal framework mandates a spirit of cooperation, yet the industry's performance metrics show a reality of escalating, high-value conflict rooted in basic non-compliance. When viewed through the lens of the extreme financial pressures prevalent in the sector, this "failure to comply" can be understood not as mere incompetence or oversight, but as a deliberate commercial tactic. In a low-margin, high-risk environment, the administration of the contract—issuing payment notices, valuing variations, granting extensions of time—becomes a powerful tool. Delaying a payment or rejecting a valid claim is a direct method for a party to protect its own cash flow and transfer financial pressure, an action that is in direct contravention of the "spirit of mutual trust" but is often perceived as necessary for survival. This reframes the problem from one of training "people need to understand the contract" to one of commercial incentives "the system rewards those who weaponize the contract", a far more profound and uncomfortable truth.
This is precisely where the gap between contractual aspiration and commercial reality must be bridged. It is not enough for teams to know the contract; they must be equipped with the behavioural skills to navigate commercial pressures collaboratively. Specialist coaching and advisory services, such as those offered by Black Pear Advisory, can be instrumental here. By diagnosing the root causes of friction and providing targeted coaching, they help teams move from a mindset of contractual weaponisation to one of mutual problem-solving, ensuring compliance is driven by a shared goal of project success rather than fear of penalty (Black Pear Advisory, 2025).
The Architecture of Adversarialism: A System Under Strain
The adversarial behaviours that lead to such widespread conflict are not arbitrary acts of malice. They are rational, albeit destructive, responses to the immense and often contradictory pressures placed upon each party in the infrastructure delivery chain. The system itself is an architecture of adversarialism, designed in a way that cascades pressure downwards, with each party incentivised to protect its position at the expense of others.
The Client's Dilemma: Value, Scrutiny, and Uncertainty
Public sector clients, who commission a significant portion of UK infrastructure, operate in a uniquely challenging environment. They are caught in a triangulation of pressures: the political demand to deliver long-term public value, the reality of short-term spending cycles, and intense public and governmental scrutiny over costs (Public Accounts Committee, 2021). This environment fosters a deep-seated risk aversion. The primary mechanism for managing this risk is often not collaborative mitigation but contractual transfer, pushing liability down the supply chain regardless of which party is best placed to manage it (CBI, 2020).
This is compounded by a lack of stable, long-term strategic direction from government. Without a clear and committed pipeline of projects, it is difficult for clients to plan effectively and for the supply chain to invest in the skills and innovation needed to drive down costs (ICE, 2024; ICE, 2025). This uncertainty forces a focus on short-term project delivery metrics over long-term whole-life value (Public Accounts Committee, 2021). Furthermore, public clients may lack the deep, in-house technical and commercial expertise required for today's complex megaprojects, leading to an over-reliance on third-party advice that often prioritises minimising upfront capital cost and maximising risk transfer (CBI, 2020; ICE, 2024). For local government authorities, these pressures are even more acute, as they must attempt to align with national strategic priorities while operating with severely strained resources (Trowers & Hamlins, 2025).
The Contractor's Bind: Fine Margins, Transferred Risk, and Regulatory Burden
Main contractors sit at the confluence of these pressures. They are expected to deliver increasingly complex projects against a backdrop of intense price competition that has eroded profit margins to unsustainable levels (CBI, 2020; Pinsent Masons, 2021). The CBI notes that at such "fine margins," the acceptance of significant, unquantifiable risks presents a "persistent existential threat to businesses, even in good times" (CBI, 2020).
When a client transfers a risk that is difficult to price or manage—such as unforeseen ground conditions, planning delays, or ambiguous design information—the contractor is left with a stark choice. They can either price that risk at a level that likely makes their bid uncompetitive, or they can accept the risk and then seek to manage the financial exposure aggressively. This latter path almost inevitably involves transferring the risk down to the supply chain through amended, back-to-back subcontract conditions (Milner, 2019; Omotayo, 2022). This dynamic is exacerbated by a host of external pressures, including persistent labour and skills shortages, volatile material costs, and the increasing complexity of regulatory compliance, such as the new duties under the Building Safety Act (Roofing Today, 2025; PlanRadar, 2025). Each of these factors further squeezes already thin margins, increasing the incentive to use contractual mechanisms to protect financial standing
The Subcontractor's Reality: The End of the Chain
Subcontractors, who execute an estimated 80-90% of the work on major projects, are at the sharpest end of this pressure cascade (Milner, 2019). They are typically smaller organisations with less financial resilience, yet they are often expected to carry a disproportionate share of the project risk that has been passed down the contractual chain (Milner, 2019).
Qualitative research reveals a deep and pervasive distrust among subcontractors towards main contractors, particularly concerning payment and the valuation of work (Milner, 2019). A common cause of disputes is the practice of main contractors delaying or reducing payments to manage their own cash flow, a behaviour that is fundamentally corrosive to any trusting or collaborative relationship (Milner, 2019; Tenarys Law, 2025). Subcontractors often lack the time and legal resources to fully scrutinise the complex and heavily amended subcontracts they are asked to sign, leaving them vulnerable to "harsh/punitive terms" designed to limit their entitlements (Milner, 2019; Omotayo, 2022). This creates a vicious cycle: to win work in a competitive market, subcontractors are forced to submit low bids with minimal margin for error. They must then aggressively pursue claims for variations and delays to remain solvent, which in turn reinforces the main contractor's perception of them as adversarial and perpetuates the entire dysfunctional culture (Milner, 2019).
This analysis reveals that the industry's traditional, linear procurement model is the structural enabler of this pressure cascade. By separating design from construction and treating the supply chain as a series of discrete, transactional entities, the model facilitates a culture of risk shedding rather than risk management. Risk is not allocated to the party best able to control it; it is transferred to the party with the least contractual power. In such a system, adversarialism is not a bug; it is a core feature. A dispute is the almost inevitable consequence when a risk materialises, because the party contractually obliged to bear its cost is the one least capable of managing its financial impact.
Breaking this systemic cycle often requires an external catalyst. An advisory firm like Black Pear Advisory specialises in untangling these complex, ingrained dynamics (Black Pear Advisory, 2025). Through a process of deep, data-driven diagnostics, they can identify the specific pressure points and behavioural patterns that perpetuate conflict within and between organisations. By co-designing bespoke interventions and coaching leaders and teams, they help transform these adversarial responses into constructive dialogues, rebuilding the trust necessary for genuine collaboration to take root.
The Unseen Cost: Commercial Conflict and the Mental Health Crisis
The relentless pressure, uncertainty, and conflict inherent in the industry's adversarial commercial model are not merely business challenges; they are significant psychosocial risk factors that inflict a devastating human toll. There is a direct and undeniable link between the way the industry conducts its commercial affairs and its profound mental health crisis.
The statistics are shocking and shameful. In the UK, two construction workers take their own life every single working day (ICE, 2024). The suicide rate for male construction workers is four times higher than the national average (Pinsent Masons, 2024; PMC, 2024). This tragedy is the sharpest point of a much broader problem. The Health and Safety Executive (HSE) reports that around 14,000 workers in the sector suffer from work-related stress, depression, or anxiety (Pinsent Masons, 2024). Academic research suggests the reality is even starker, with some studies indicating that between 70% and 82% of construction workers experience these issues (Pinsent Masons, 2024; PMC, 2024).
The specific stressors that fuel this crisis are a direct reflection of the commercial pressures detailed previously. Researchers consistently identify factors such as long and irregular hours, intense pressure to meet tight deadlines and budgets, job insecurity tied to project-based work, and a high-conflict environment as primary drivers of poor mental health (Pinsent Masons, 2025; iHASCO, 2019). The financial disputes over payment, the constant threat of liquidated damages, and the anxiety of managing transferred risks are not abstract commercial issues; they manifest as chronic stress for the individuals responsible for managing them.
This toxic environment is exacerbated by the industry's infamous "macho culture" (Pinsent Masons, 2024). This culture, which prizes toughness, resilience, and an ability to endure hardship without complaint, is both a product of the adversarial system and a critical barrier to addressing the mental distress it causes (Pinsent Masons, 2025; iHASCO, 2019.). In an environment where commercial survival depends on being a "tough" negotiator and an aggressive defender of one's position, showing vulnerability or admitting to stress is often perceived as a sign of weakness. This stigma prevents individuals from seeking help, allowing mental health issues to escalate in silence (iHASCO, 2019).
A toxic feedback loop is thus created. The adversarial commercial model selects for and rewards combative behaviours, which reinforces a "macho culture" that stigmatises mental health. This, in turn, prevents the workforce from developing the emotional resilience, psychological safety, and collaborative skills necessary to break free from the adversarial model. The commercial problem and the mental health crisis are not separate issues; they are two sides of the same coin, inextricably linked and mutually reinforcing.
Addressing the mental health crisis therefore requires a direct assault on the commercial conflict that fuels it. This is the focus of behavioural strategists like Dr Martin Perks of Black Pear Advisory (Black Pear Advisory, 2025.). By working with leadership teams to build high-performing cultures founded on psychological safety and mutual trust, they help dismantle the toxic "macho" environment . The goal is to create a commercial setting where collaboration reduces stress, open communication is the norm, and the relentless pressure that breaks individuals is replaced by a supportive, outcome-focused enterprise.
Conclusion: From Paradox to Principled Performance
The collaboration paradox in UK infrastructure is not an unsolvable riddle. It is the inevitable outcome of a system where commercial incentives are fundamentally misaligned with collaborative principles. For decades, the industry has attempted to solve a structural problem with behavioural nudges, asking people to "be more collaborative" while leaving in place a commercial framework that makes such behaviour commercially irrational, if not impossible. The data is clear: contractual clauses mandating a "spirit of mutual trust," such as NEC Clause 10, are rendered impotent by a business model that rewards risk transfer, price-based competition, and the weaponisation of contractual processes (Arbicon, 2025; CBI, 2020; Arcadis, 2021).
Asking for better behaviour within this broken system is futile. The only viable path forward is to adopt new commercial and delivery models that make collaboration the most logical, efficient, and profitable approach for all parties. This requires a move away from the transactional, fragmented model towards a more integrated, enterprise-based approach.
Project 13, an initiative sponsored by the Institution of Civil Engineers (ICE) and the World Economic Forum, provides a blueprint for such a transformation (Project 13, 2016). Its principles directly address the root causes of adversarialism identified throughout this report.
It replaces short-term, transactional relationships with long-term, outcome-focused "enterprises" that bring together owners, partners, and suppliers into integrated teams (Project 13, 2016).
It rejects the practice of risk transfer, advocating instead for risk to be allocated to the party best equipped to manage it, with a preference for risks to be jointly owned and mitigated (Project 13, 2016).
It shifts the basis of reward away from the lowest price and towards the value added to overall customer outcomes, creating aligned incentives for the entire enterprise to succeed (Project 13, 2016.).
This is not a theoretical ideal. These principles are being actively adopted by some of the UK's largest and most sophisticated infrastructure clients, including Anglian Water, Heathrow, the Environment Agency, and National Grid, demonstrating that a different way of working is not only possible but is already being implemented (Project 13, 2016; Constructing Excellence, 2022.). Case studies from organisations like Constructing Excellence further prove that collaborative procurement models can deliver better outcomes, faster delivery, and improved sustainability (Constructing Excellence, 2022.).
The challenge now falls to the senior leaders across the industry. The time for paying lip service to collaboration is over. The future sustainability of the UK infrastructure sector—and the health and wellbeing of its people—depends on the courage to champion the difficult but necessary work of fundamental reform. This means moving beyond the comfort of familiar but flawed transactional models and embracing new enterprise-based approaches that align commercial incentives with contractual and ethical commitments. Solving the collaboration paradox is more than a commercial imperative; it is a moral one.
Making this transition from a transactional to an enterprise model is a profound challenge of organisational change. It requires more than a new playbook; it demands a new mindset. This is where specialist guidance becomes critical. Black Pear Advisory provides the expert coaching and behavioural strategies necessary to navigate this transformation (Black Pear Advisory, 2025.). By working with organisations to diagnose their unique challenges, design targeted interventions, and deliver leadership coaching, they help embed the collaborative behaviours that turn the principles of models like Project 13 into a lived reality, ensuring the industry can finally resolve its collaboration paradox (Black Pear Advisory, 2025.).
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