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Overview of Construction Dispute Handling in 2023

On July 15, 2023, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) disclosed its annual report regarding the handling of construction disputes throughout Japan, encompassing both national and prefectural review committees. This report aims to provide the public with insights into the activities and efficacy of these committees.

What is the Construction Dispute Review Committee?

The Construction Dispute Review Committee operates as an extrajudicial dispute resolution organization established under the Construction Business Act. Its primary objective is to resolve disputes concerning construction contracts swiftly, simply, and fairly, thus reducing the burden on the judicial system.

Annual Data Overview

In the fiscal year 2023, there were a total of 116 applications for dispute resolution, marking an increase of seven applications compared to the previous year. With 94 cases carried over from the preceding year, the total resolved cases were 111, resulting in 99 cases being carried over into the next fiscal year.

Breakdown of Applications

When examining the applications by type of parties involved, individual clients lodged the highest number of claims against contractors, with a total of 41 claims. Regarding the type of disputes, issues regarding construction deficiencies topped the list, also totaling 41 claims. This data highlights the recurring nature of construction quality issues in the industry, signaling a need for improved standards and practices.

Central Committee Data

The central committee in charge of reviewing these disputes received 25 applications in the same fiscal year, which is a decrease of seven applications from the previous year. Recently, the central body had 27 outstanding cases, with 29 being resolved during the year, leading to 23 cases being carried over to the next year.

Details on Central Applications

From the 25 applications submitted at the central level, the most prevalent claims came from subcontractors against general contractors, totaling seven cases. The categories of disputes again showcased the prominence of construction defects, disputes regarding construction fees, and conflicts over subcontract fees, each garnering six claims. This pattern underscores ongoing tensions within the construction hierarchy, particularly between subcontractors and general contractors, frequently stemming from financial disagreements and construction quality disputes.

Conclusion

For more in-depth information regarding these findings, the detailed report can be accessed on the Ministry’s official website. The growing number of disputes reflects ongoing challenges in the construction industry, particularly concerning quality assurance and contractual relationships. The Ministry of Land, Infrastructure, Transport and Tourism continues to advocate for better practices and dispute resolution mechanisms to address these ongoing challenges efficiently.

For inquiries, interested parties can contact the Office of the Construction Dispute Review Board at the Ministry of Land, Infrastructure, Transport and Tourism. The dedicated staff will be available to provide further details and assistance related to construction dispute resolution matters.

Note: The complete annual report is available in PDF format, requiring Adobe Acrobat Reader for viewing.