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How can you reduce the risks and costs of construction dispute resolution?

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Construction disputes can be costly, time-consuming, and damaging to the reputation and relationships of the parties involved. Whether they arise from contract breaches, design errors, delays, defects, or other issues, disputes can disrupt the project delivery and affect the profitability and satisfaction of the stakeholders. How can you reduce the risks and costs of construction dispute resolution? Here are some tips to help you avoid or manage conflicts in your construction projects.

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Taso Pardalis

Sports, Media & Entertainment Lawyer | Executive Vice President & General Counsel @Ante, Inc. | Partner @ Pardalis &…

1 Plan ahead

One of the best ways to prevent disputes is to plan ahead and anticipate the potential sources of conflict. This involves defining the scope, objectives, roles, and responsibilities of each party clearly and accurately in the contract documents. It also means conducting a thorough risk assessment and allocating the risks fairly and transparently among the parties. Additionally, you should establish effective communication and collaboration channels, as well as clear and consistent procedures for change orders, payments, claims, and disputes.

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kiflemariam Abraha

Sales MarketingBuilding and Infrastructure Engineering Consultancy
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I believe this manuscript's backing of Engineering professionals' complicated labour and provincial construction material inducement input.

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Dr. Amila Gamage

ACLP Certified Trainer | Contract Management Consultant
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Other than the given suggestions, here are some other things to do to minimize the impact of disputes. 1) Effective Communication: Establish open and transparent communication channels among all project stakeholders. Regularly update all parties on project progress, changes, and potential challenges to avoid misunderstandings. 2) Proper Documentation: Maintain detailed and accurate project records. Proper documentation of communications, changes, and decisions provides a solid foundation for dispute resolution, reducing the time and resources needed to resolve conflicts.

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2 Resolve issues early

If a dispute arises, you should try to resolve it as early as possible, before it escalates and becomes more complex and expensive. This means identifying the root cause of the conflict, engaging in constructive dialogue with the other party, and seeking a mutually acceptable solution. You should also document the dispute and its resolution in writing, and keep track of the evidence and correspondence related to the issue. Resolving issues early can help you preserve the trust and cooperation of the parties, and avoid litigation or arbitration.

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Eric Swanson

Construction Inspector at Century Engineering
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I totally agree. I have found that the quicker one gets to the negotiation stage and agreeing on the issues the less production and construction losses you will encounter.

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3 Use alternative dispute resolution methods

If you cannot resolve a dispute through direct negotiation, you may consider using alternative dispute resolution (ADR) methods, such as mediation, conciliation, or adjudication. These methods are usually faster, cheaper, and more flexible than going to court or arbitration. They also allow the parties to maintain more control over the outcome and preserve their confidentiality and relationship. However, you should be aware of the advantages and disadvantages of each method, and choose the one that suits your situation and goals.

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4 Seek professional advice

Sometimes, you may need professional advice or assistance to deal with a dispute effectively. This could be from a lawyer, an expert witness, a dispute resolution board, or a dispute resolution adviser. These professionals can help you understand your rights and obligations, evaluate your options and risks, and represent your interests in a dispute resolution process. However, you should also weigh the costs and benefits of hiring a professional, and ensure that they are qualified and experienced in construction disputes.

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5 Learn from experience

Finally, you should learn from your experience and use it to improve your future practice and performance. This means reviewing the causes and outcomes of the disputes you faced, and identifying the lessons learned and best practices. You should also implement the necessary changes and improvements in your contract management, project management, and dispute resolution skills. By learning from experience, you can reduce the likelihood and impact of future disputes, and enhance your reputation and competitiveness in the construction industry.

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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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Taso Pardalis

Sports, Media & Entertainment Lawyer | Executive Vice President & General Counsel @Ante, Inc. | Partner @ Pardalis & Nohavicka,
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One of many critical tactics that we employ in contemplation of these situations is to recommend the parties enter into contract language that provides that the named architect on the project will be presented with certain disputes between the parties (delay claims, change orders etc. ) and that ultimately his decision will be binding on the parties, this often avoids arbitration and court scenarios, which are costly not just in money but in time.

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How can you reduce the risks and costs of construction dispute resolution?

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1 Plan ahead

2 Resolve issues early

3 Use alternative dispute resolution methods

4 Seek professional advice

5 Learn from experience

6 Here’s what else to consider

Construction Management

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