The downturn in property has caused major problems in the construction world.  On the one hand, there is the £10bn construction project for the 2012 London Olympics. On the other hand, there are falling house prices and a desultory house-building programme.

The UK’s construction sector certainly has much to worry about. In one week alone in July 2008, major house-builders announced 6,000 job losses. Other bad omens have been coming thick and fast – including those traditional signs of recession, an apparent rise in visits to litigation lawyers over construction contracts and the reappearance of seemingly widespread mortgage fraud.

On top of this the much-vaunted ‘home information packs’ were being roundly condemned as useless by most property experts and the new Lib Conservative Government seems poised to drop these.

The domestic house-building part of the construction market is undoubtedly suffering and stock markets are reflecting this on a worldwide basis. Leading player Redrow says the sector is ‘unlikely to see a significant improvement’ for the next year. With similar short-term pessimism, Bovis Homes has cut 40% of its workforce.

However, if government plans are fulfilled, UK housebuilding will nearly double from 130,000 new homes in 2008 to 240,000 by 2016.

Major legal problems for construction companies will include laying people off (for which they need to follow very strict new rules on dismissal to avoid being taken to employment tribunal); contract disputes (when clients or fellow contractors renege on commitments); and debt and insolvency issues.

However, as the 2012 Olympics illustrates, there are massive opportunities out there which construction players with good business brains can exploit. For instance, the Olympics Delivery Authority (ODA) is tying contractors in to ensure that 90% of waste in the construction phase is recycled or re-used.

Contractors who get to grips with this can then export the techniques they learn abroad as they will probably be at the forefront of this kind of technology. Similarly, the ODA is developing a scheme of swift arbitration on disputes in order to keep on timetable. Contractors who learn from this system can use it as a marketing tool in future. 

As these areas develop, construction lawyers will have to get more specialist – helping clients comply with the ODA’s 90% recycling requirement, for instance, or getting them through the very speedy arbitration procedures of the ODA.

One-man bands in the UK may suffer during the next couple of years and many will probably be forced into merger. But larger organisations that can invest in international expansion will find broadening opportunities in the EU and beyond. 

Northumbria University, for instance, is working on training and other collaboration programmes with Chinese construction companies. One obstacle to be overcome, of course, is the difference between the UK and Chinese legal systems – but several UK law firms now have offices in the People’s Republic and China is becoming markedly more open in the way its legal system interacts with the rest of the world.