Dispute avoidance

[edit] Introduction

In the 1990 book Conflict: Resolution and Provention, John Wear Burton refers to a dispute as “a short-term disagreement that can result in the disputants reaching some sort of resolution; it involves issues that are negotiable.”

Construction disputes are generally consistent with Burton's definition. They tend to arise between two parties due to a disagreement over a specific issue or situation. Addressing the issue can include establishing responsibility for the contractual consequences associated with it and then coming up with a reasonable solution or settlement.

[edit] Dealing with disputes

Construction contracts can generate a plethora of disputes but typically they result from:

• The contractor claiming against the client due to a change in the scope of works.
• The client claiming against the contractor for poor workmanship (defective works).
• Claims for non-payment of fees.
• Delays and cost overruns.
• Design deficiencies and lack of information.

For more information see: Causes of disputes.

In the past, disputes like these might have been resolved in the courts. However, this can be a long, complex, adversarial, public and potentially costly process for all involved.

For more information, see: Dispute resolution.

As a result, modern construction contracts may include provisions for the resolution of disputes by agreed alternative dispute resolution (ADR) procedures typically involving mediation, adjudication and arbitration. These are generally less formal than court proceedings and should be faster, less expensive and less time consuming, allowing the parties to maintain a good relationship.

For more information see: Alternative dispute resolution.

[edit] Dispute avoidance rather than ADR

In certain situations, it may be possible to take specific precautionary measures to avoid ADR or formal dispute resolution or the need for mediation, adjudication, arbitration or litigation.

Proactive avoidance measures might include:

• Drafting contracts carefully.
• Monitoring jobs closely.
• Keeping accurate schedules and records.
• Staying informed about relevant legal issues.
• Training management personnel adequately.
• Considering innovative project delivery methods and technologies.

[edit] Additional dispute avoidance approaches

Other measures may include the adoption of dispute avoidance procedures or protocols (DAPs), the use of dispute avoidance forums or panels or the appointment of a dispute board.

[edit] Dispute avoidance practices or protocols

This method incorporates certain avoidance practices within contracts to stop disputes from escalating in construction projects.

In its explanation of DAPs, the Arcadis ‘2021 Global Construction Disputes Report: The road to early resolution’ says, “The opportunity for the UK construction industry is to find a different dispute avoidance method which is as successful in the uptake as adjudication, but avoids the time and costs associated with the ‘mini-trial’ adjudication process. One solution is to adopt dispute avoidance protocols within contracts. An example introduced during 2021 is the jointly launched Chartered Institute of Arbitrators’ Business Arbitration Scheme and the Joint Contracts Tribunal Dispute Adjudication Board (DAB) Rules. The purpose of a DAB is to assist the parties in the avoidance of disputes while the project is ongoing. This process has popularity outside of the UK, in particular some FIDIC forms. While these procedures are not new to the UK market, we wait to see whether there will be an increase in uptake."

[edit] Dispute avoidance forums or panels

This involves a panel of impartial (and mutually agreed upon) experts to examine issues (and potential issues) early in the process. Ideally, the forum can provide suggestions to help prevent a dispute from developing.

During the 2012 London Olympic and Paralympic Games, an independent dispute avoidance panel (IDAP) was established. According to PLC Dispute Resolution, Thomson Reuters, 2012 Olympics Independent Dispute Avoidance Panel, the purpose of the panel was “...to help avoid contractual disputes during the work to deliver the venues and infrastructure for the London 2012 Olympic and Paralympic Games.” In this instance, the panel focussed on finding pragmatic solutions before potential problems could turn into disputes that might require lengthy resolution measures.

[edit] Dispute boards

The RICS Dispute Resolution Service, allows the formation of a dispute board consisting of unbiased individuals. Members of the board assist the parties in the avoidance of disputes throughout the duration of the contract. They can also deal with disputes quickly, should they arise.

For more information see: Dispute resolution boards.

[edit] Early warning

NB The NEC Engineering and Construction Contract makes provision for early warning procedures. Both parties must give early warning of anything that may delay the works, or increase costs as soon as they become aware of them. They should then hold an early warning meeting to discuss how to avoid or mitigate impacts on the project.

For more information see: Early warning.

[edit] Related articles on Designing Buildings

• Alternative dispute resolution for construction ADR
• Compulsory Alternative Dispute Resolution.
• Conflict avoidance.
• Construction disputes.
• Contract claims in construction.
• Dispute resolution.
• Dispute resolution board.
• Dispute resolution procedure.
• Disputes vs conflicts.
• Evaluation of claims.

[edit] External resources

• Arcadis, 2021 Global Construction Disputes Report: The road to early resolution.
• Brandon Bang, Bae, Kim & Lee LLC, The Legal 500, Dispute Avoidance and Management: Practical Tips for Contractors and Owners.
• John Burton, Conflict: Resolution and Provention.
• Christopher A. Gorse School of the Built Environment, Leeds Metropolitan University, Conflict and conflict management in construction.
• PLC Dispute Resolution, Thomson Reuters, 2012 Olympics Independent Dispute Avoidance Panel.
• Royal Institution of Chartered Surveyors, Dispute Boards.