The construction disputes are unavoidable, but you can try and avoid them early by practicing sound project management from day one.
Clear contract language, documentation and communication practices can all play an integral part in preventing disputes from the start. According to Ben Franklin’s famous quote: “An ounce of prevention is worth a pound of cure”.
1. Negotiation
Construction disputes can have a devastating impact on project schedules and budgets. Resolving disputes quickly and fairly can protect relationships, reduce costs, and maintain the project’s reputation.
Negotiation is a useful method of conflict resolution that can be implemented throughout a project lifecycle. Mediation involves an independent third-party facilitator who facilitates dialogue between disputing parties and guides them toward finding an acceptable resolution – whether before filing suit, while an action is ongoing, or after conclusion of litigation case.
Many construction projects involve multiple disciplines of professionals and contractor trades collaborating together on one platform to resolve conflicts more quickly and cost-effectively than using traditional legal means. By employing online dispute resolution (ODR), all parties involved can work collaboratively towards finding an amicable resolution without going down a legal route.
2. Mediation
Construction disputes can arise due to any number of reasons. When contracts are unclear or incomplete, work may fall short of expected standards, or there might be disagreement over project changes.
Stakeholders must ensure effective risk mitigation processes and dispute resolution strategies are documented within contracts to minimize costs and preserve relationships during project implementation. It’s critical that disputes be quickly addressed in order to preserve productivity.
Mediation is often the more efficient solution than litigation or arbitration. Mediation uses an impartial third-party mediator as a facilitator in helping both sides find common ground and arrive at mutually acceptable solutions to their conflict. Mediation saves both time and money when compared with litigation while simultaneously maintaining relationships between all involved. If negotiation does not succeed in reaching agreement between both sides then mediation could lead to arbitration, which provides binding decisions.
3. Arbitration
Ben Franklin once famously stated: “an ounce of prevention is worth a pound of cure.” This maxim can also apply when it comes to dispute resolution alternatives like direct negotiation between parties, mediation before an impartial intermediary, arbitration before one or three arbitrators or litigation before a judge or jury in state and federal courts – each offer their own advantages and disadvantages.
Mediation often results in an enforceable settlement agreement between disputing parties, while early mediation helps contractors avoid expending resources on frivolous claims.
4. Court of Law
Litigation should only ever be considered as a last resort, yet litigation is an option when other forms of dispute resolution cannot. A full-fledged trial led by a judge and contested by lawyers eventually leads to legally binding decisions; however, this process can be costly and time consuming.
Construction professionals should devise several dispute resolution strategies in order to maintain business relationships and limit damages. Conflicts may stem from contract terms, project details, site issues that arose unexpectedly or communication problems that lead to permit delays. Conflict should be avoided through clear, comprehensive, and understandable contracts. Should a dispute arise, mediation is an effective means of mediating between disputants to come to mutually agreeable solutions. If mediation fails, arbitration could be the next step: this involves having a neutral third-party analyze the case and make binding decisions about it; typically this method is faster, cheaper, and less formal than litigation while offering no appeal process like mediation does.
