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How can you prepare your project team to handle disputes and claims?

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Disputes and claims are inevitable in any construction project, especially when there are complex contracts, multiple parties, and changing conditions. However, they can also be costly, time-consuming, and damaging to the relationships and reputation of your project team. Therefore, it is essential to prepare your team to handle disputes and claims effectively and efficiently, and to prevent or minimize them as much as possible. Here are some tips on how you can do that.

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1 Understand the contract

The contract is the foundation of your project and the source of your rights and obligations. It also defines the scope, schedule, budget, quality, and risk allocation of your project. Therefore, you and your team should understand the contract thoroughly and comply with its terms and conditions. You should also review the contract regularly and update it as needed to reflect any changes or variations that may occur during the project. This will help you avoid misunderstandings, disputes, and claims arising from the contract.

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Dr. Brunetta Nelson

Publisher, Author, Certified Life Coach, Community Activist, Entrepreneur, Radio Host, Public Speaker, Business-Life Coach, Motivational Speaker!
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Show them real examples, and allow them to see and discuss the examples openly. People learn greater with visuals and hands-on experiences. Performing visuals will be impactful and impressionable.

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Ali Hammad

B.Eng | PMP? | P. Eng | Project & Program Management Specialist
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From customer/client point of view, definitely clauses written in the contracts must be adhered, proof read with requirements of Legal(in case needed), from contractor/vendor perspective claims and variations must be legit with respect to amount of work done with the back end working of supporting documents/measurement sheets/ client endorsement of variations and claims in order to achieve the variation from the baseline/original contract

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2 Communicate clearly and promptly

Communication is key to any successful project, and especially to dispute resolution and claim management. You and your team should communicate clearly and promptly with all the stakeholders involved in the project, such as the owner, the designer, the subcontractors, the suppliers, and the regulators. You should also document all the communication and keep records of any decisions, instructions, notices, requests, or approvals that may affect the project. This will help you establish trust, cooperation, and transparency among the parties, and provide evidence in case of disputes or claims.

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3 Identify and mitigate risks

Risks are inherent in any construction project, and they can lead to disputes or claims if they are not managed properly. You and your team should identify and mitigate the potential risks that may affect the project, such as design errors, site conditions, weather, delays, defects, or accidents. You should also monitor and report the risks regularly and implement contingency plans or corrective actions as needed. This will help you reduce the likelihood and impact of disputes or claims, and protect your interests and liabilities.

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Jason Widener

(RRC) Registered Roof Consultant iIBEC, (RRO) Registered Roof Observer iIBEC, (CDT) Construction Document Technologist CSI, Inc.
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Risks are real and exist no matter what so it’s important to realize this and practice risk management as soon as possible. It actually first starts in the sales process. Defuse any bombs then so the Owner has a clear expectation from the beginning. Many sales people don’t want risk the sale and therefore won’t do what is best for everyone. Next HUGE thing is written documentation. Record what happens, who you speak to, and provide written follow-up and save correspondence. The step is often skipped. And, make yourself approachable!!! This can be a huge obstacle. Create an open door policy where people feel welcome to come talk about issues: good, bad, or ugly. Combine these and you will rest easier. Go focus on something else!

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Jason Widener

(RRC) Registered Roof Consultant iIBEC, (RRO) Registered Roof Observer iIBEC, (CDT) Construction Document Technologist CSI, Inc.
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Risks are real and exist no matter what so it’s important to realize this and practice risk management as soon as possible. It actually first starts in the sales process. Defuse any bombs then so the Owner has a clear expectation from the beginning. Many sales people don’t want risk the sale and therefore won’t do what is best for everyone. Next HUGE thing is written documentation. Record what happens, who you speak to, and provide written follow-up and save correspondence. The step is often skipped. And, make yourself approachable!!! This can be a huge obstacle. Create an open door policy where people feel welcome to come talk about issues: good, bad, or ugly. Combine these and you will rest easier. Go focus on something else!

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4 Resolve issues early and amicably

Despite your best efforts, disputes or claims may still arise during the project. However, you and your team should not ignore or escalate them unnecessarily. Instead, you should try to resolve them early and amicably, using the dispute resolution methods that are specified in the contract or agreed upon by the parties. These methods may include negotiation, mediation, arbitration, or litigation, depending on the nature and severity of the dispute or claim. You should also seek legal advice or representation if needed, and follow the rules and procedures of the chosen method. This will help you save time, money, and reputation, and preserve the relationships and goodwill of your project team.

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Trent Cotney

Partner and Construction Team Leader at Adams & Reese, LLP; NRCA, CRCA, WSRCA, FRSA, IRCA, RCASC, RCAW, TARC, NTRCA, URCA, RT3, ERA, and NSA General Counsel
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An ounce of prevention is worth a pound of cure. If you can engage in self help, you will end up saving yourself time and money; and by doing so, will not need to hire a lawyer. Nobody likes lawyers.

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5 Learn and improve

Finally, you and your team should learn from your experience and improve your skills and practices in dispute resolution and claim management. You should conduct a post-project review and evaluate the causes, outcomes, and lessons of the disputes or claims that occurred during the project. You should also solicit feedback from the other parties and stakeholders involved in the project, and identify the areas of improvement or best practices that you can apply to your future projects. This will help you enhance your performance, quality, and satisfaction, and prevent or reduce disputes or claims in the future.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Alberto Lindner

Universidad Metropolitana, Network Advisors, LLC. Consultor externo en empresas manufactureras, como Industrias Kaizen, CA y construcción. Educador con mas de 32 a?os en ejercicio
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The Project Management Body of Knowledge, PMBoK, which is in its 7th edition, has embraced the agile methodology. In previous versions, this project management guide, applicable to construction, developed a book attached to the methodology. This annex added, apart from the 9 management variables, a new special one for construction. They are the environment, the associated risks, finances and costs and finally, contractual discussions, disputes and claims. It is perhaps one of the texts most dedicated to the topic of conflict resolution. It is worth keeping in mind.

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How can you prepare your project team to handle disputes and claims?

1

2

3

4

5

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1 Understand the contract

2 Communicate clearly and promptly

3 Identify and mitigate risks

4 Resolve issues early and amicably

5 Learn and improve

6 Here’s what else to consider

Construction Management

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