Dispute resolution strategies for construction projects

Abstract

One of the most important, but often overlooked steps in developing a project is a plan to prevent and handle conflict, a Conflict Management Plan. Leading construction experts have identified Productivity, Innovation, Cost Control, Safety, and Litigation Expenses as critical areas in need of improvement in the construction industry of this next century. In the United States alone, $60 billion are spent every year on lawsuits, of which the construction industry accounts for nearly $5 billion. Various dispute avoidance and resolutions techniques are presented that aim to prevent disputes before they arise and minimize the impacts if they do. These techniques are the tools then used in the Conflict Management Plan. A Conflict Mitigation Plan looks at each project individually to establish a set of criteria for controlling conflicts. It assesses how much conflict you will encounter, how severe each conflict might be, then presents cost effective ways to avoid conflict and curb these disputes. Similar to the contract documents it should be complete, unbiased, understood, and accepted by all the parties involved. All of the project participants such as the owners, the owner's representatives, designers, lawyers, and contractors are responsible for designing, reviewing and revising it accordingly. No one person or field should be responsible for developing this plan. Designing a conflict mitigation plan compels the owner to contemplate the conflict that might arise. This will allow the owner to allocate these risks and develop a plan to handle discrepancies. By doing this upfront and with each subsequent review, everyone involved has agreed to follow this plan, reducing the push for lengthy, costly court proceedings. To implement a Conflict Management Plan one must assess the project situation by identifying the sources of conflict that might occur, then analyze the severity and impact each of these conflicts might have. Match the conflict with a corresponding DART, to reduce or avoid the conflict. Draft the plan. Review and revise it as needed.