In the modern world, construction projects have become inevitably complex due to the dynamic business and technology-oriented environment.
Major improvements in nowadays construction projects are;
- Great deal of inputs involvement,
- Accretion of numerous parties engaged,
- Variety of technological attachment.
Poor stakeholder relationship frequently leads to many conflicts during the construction. Its ultimate results could be an origination of disputes.
Disputes derive to:
- Additional cost involvement,
- Additional time involvement,
- Damaging the reputation of the company,
- Depression in socio-economy in the country,
- Spoiling stakeholders relationship.
Disputes
Disputes are widespread in every construction project due to ever-rising customer requirements and the number of stakeholder involvements.
It is a common problem in the construction industry.
These dispute needs to be managed by experienced and expert personnel through appropriate actions and strategies.
However, dispute handling may require the involvement of dispute management experts who has specific skills and competencies.
Primary causes for dispute occurrence
- Erroneous contract interpretation,
- Drafting of ambiguous documentation,
- Lack of information and project scope,
- Issues regarding progress and quality,
- Probable issues regarding adequate and timely payments, etc.
Root causes
- Unfair risk allocation among parties,
- Unrealistic time/cost/quality targets set by the client,
- Adversarial industry culture,
- Inappropriate contract type,
- Unrealistic information expectations.
Proximate causes
- Inadequate brief,
- Slow client responses,
- Inaccurate design information,
- Inaccurate design documentation,
- Inappropriate contract form,
- Inadequate contract administration,
- Inappropriate contractor selection.
Handling Disputes
- Dispute Management
- Dispute avoidance
- Dispute Resolution
Dispute Management
Dispute management is a process of problem identification, quantification, and resolution. It involves developing a system that includes defining a set of skills required to minimize the possibility of disputes occurring, and managing them effectively without escalation.
It needs proactive measures rather than reactive in dispute resolution.
Dispute management is effective in providing a solution for disputes. Its primary focus should be on managing and controlling the causes of disputes. Therefore, the involvement of key project players with skill, knowledge, and experience is essential in the dispute identification stage.
Concentrating solely to avoid conflicts before it escalates into a major dispute may be a great comfort to the project.
Dispute Avoidance
For avoiding disputes, a careful investigation and complete awareness of the project are necessary. Dispute avoidance is to handle and resolve conflict before disputes occur or before it escalates into a major disagreement or dispute.
Initial involvement in the project may bring all means of settling issues to avoid disputes, consistent with the requirements of the client.
For example, a simplistic and straightforward approach of care and management in the preparation of documentation without ambiguity may avoid disputes at later stages.
Dispute Resolution
Dispute resolution arises only when there is a dispute and reference is made to resolve it. Disputes can be resolved in many ways using various procedures, such as by court proceedings, using other formal or informal settings involving Alternative Dispute Resolution (ADR) methods.
ADR methods include dispute resolving processes and techniques that fall outside of the government judicial processes.
Instead of time consuming and expensive litigation process, ADR methods were introduced to provide effective and efficient solutions for disputes. ADR methods eliminate most of the undesirable features of litigation.
However, it is advisable to resolve disputes with the ‘‘least possible intervention by an outside third party’’.
ADR popularity has increased due to its flexibility, cost-effectiveness of the process, and ability to bring a speedy conclusion to the problem.