Dispute Resolution

Construction projects are usually long term operations with high uncertainty and complexity, and it is impossible to resolve every detail and foresee every contingency at the outset. As a result, situations often arise that result in disputes between the parties to the contract.

Where disputes occur, the parties to the contract should first attempt to resolve them amongst themselves, as this is likely to be the fastest and least expensive solution, allowing the project to continue without disruption and maintaining good working relationships.

Where this is not possible, it may be necessary to seek a third party to resolve the dispute.

However, taking disputes to the courts can be expensive, complex, adversarial and time consuming. This may not be appropriate on construction projects, where a quick resolution may be needed so that the works can proceed and where it is important that the parties to the contract maintain a good working relationship.

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

ADR typically involves procedures such as mediation, adjudication, arbitration, or a combination. Large or complex projects may have additional tiered dispute resolution procedures (with obligations to negotiate in good faith), dispute resolution boards, steering committees and partnering meetings.