Disputes Resolution in Construction management.
Construction, is the process of constructing a building or infrastructure, construction
contract provides a legal binding agreement, for both the owner and the
builder, that the execute job will receive the specific amount of the
composition or how the compensations will be distributed. The process involves building
or construct a certain project for various use like Residents and non-residential
houses, Industries and infrastructures. Each construction project must be
governed by the something called Contract. So that to maintain value of money
and also to protect the buyer.
Construction disputes refers
to the problems that can be faced during the construction process. The disputes
can arise during the formation, meaning, managing the contract and breach or
termination of construction.
Various methods for Resolving Conflicts and
Disputes in construction contract are as follows:-
Mediation this is a voluntary process in which an impartial person (the mediator) helps
with communication and promotes reconciliation between the parties which will
allow them to reach a mutually acceptable agreement. Mediation often is the
next step if negotiation proves unsuccessful.
At the beginning of the mediation session, the mediator will describe
the process and the ground rules. The parties or their attorneys have an
opportunity to explain their view of the dispute. Mediation helps each side
better understand the other’s point of view. Sometimes the mediator will meet
separately with each side.
Nature or characteristics of Mediation
i.
Voluntary,
informal and flexible
ii.
Private
and confidential, avoiding public disclosure of personal or business problems
iii.
Can reduce
hostility and preserve ongoing relationships.
iv.
Promotes
communication and cooperation
Adjudication This is a process in which a neutral third party will
give a decision on a dispute. For example, The Housing Grants, Construction and
Regeneration Act 1996 (the Construction Act) states that parties to a
construction contract may refer their disputes to an adjudicator. Adjudication
has become known as a ‘pay first, argue later’ way for parties to resolve their
disputes. A successful party to adjudication can apply to the Technology and
Construction Court to enforce an adjudicator’s decision. All the decisions made
by adjudicator will be binding, unless or until it is revised in arbitration or
litigation.
Adjudication has the
following benefits
i.
Adjudication is a quick process, which is designed to ensure that
cash flow is maintained during the construction process.
ii.
Although it is still possible to go to the Court, in most cases
the decision of the adjudicator decides the dispute.
iii.
Adjudication is less expensive than court proceedings.
Arbitration This refers to the
submission of a disputed matter to an impartial person (the arbitrator) for
decision.
The Process of arbitration is typically an out-of-court
method for resolving a dispute. The arbitrator controls the process, will
listen to both sides and make a decision. Like a trial, only one side will
prevail. Unlike a trial, appeal rights are limited. In a more formal setting, the arbitrator will conduct a hearing where
all of the parties present evidence through documents, exhibits and testimony.
The parties may agree to, in some instances, establish their own procedure; or
an administrating organization may provide p
How
and When Arbitration is used? A common use of arbitration is in
the area of labor disputes between fire fighters and the city in wage disputes,
for example. You will usually be represented by an attorney in arbitration and can involve either one arbitrator or a
panel of three arbitrators.
Nature or characteristics of
arbitration.
- Each party will have the
opportunity to present evidence and make arguments
- May have a right to choose an
arbitrator with specialized expertise
- A decision will be made by the
arbitrator which may resolve the dispute and be final
- Arbitrator’s award can be
enforced in a court
Litigation
/ going to court. Litigation
is the use of the courts and civil justice system to resolve legal
controversies. It can be used to compel opposing party to participate in the
solution.
The Process
of litigation is begun by filing a lawsuit in a court. Specific rules of
procedure, discovery and presentation of evidence must be followed. The
attorney for the other side will want to take your deposition to learn more
about the facts as you see them and your position in the case. There can be a
number of court appearances by you and/or your lawyer. If the parties cannot
agree how to settle the case, either the judge or a jury will decide the
dispute for you through a trial.
How and When Litigation Is Used? Our American civil justice system
is one of the best in the world. Our Constitution gives us the right to a fair
trial. If you want your day in court with a judge or jury of your peers
deciding the outcome, then the pursuit of litigation and trial of the case is
for you.
The characteristics of Litigation are as follows
i.
The
decision is based on the law
ii.
The
decision can be final and binding
iii.
Right
of appeal exists
iv.
Involuntary - a defendant must participate (no
choice)
v.
Formal and structured rules of evidence and
procedure
Negotiation,
This is the most basic means of settling differences. It is
back-and-forth communication between the parties of the conflict with the goal
of trying to find a solution.
This Process: You may hire an attorney to negotiate
directly with the other side on your behalf. There are no specific procedures
to follow - you can determine your own - but it works best if all parties agree
to remain calm and not talk at the same time. Depending on your situation, you
can negotiate in the board room of a big company, in an office or even in your
own living room.
Negotiation is used when, most people negotiate every day. In some
conditions you may want the help of a lawyer to help you negotiate a fair deal.
Negotiation is the first method of choice for problem-solving and trying to
reach a mutually acceptable agreement. If no agreement is reached, you may
pursue any of the other options suggested here.
The characteristics of Negotiation are,
- Voluntary
- Quick and inexpensive
- Informal and unstructured
- Private and confidential
v.
Negotiated agreements can be enforceable
Reconciliation,
also is known as Conflict
resolution, here the committed group members
attempt to resolve group conflicts by actively communicating information
about their conflicting motives or ideologies to the rest of the group, For
example, intentions reasons for holding certain beliefs and by engaging in collective negotiation. The term “conflict resolution” may also be used
interchangeably with “dispute resolution”.
They are often the more appropriate methods of dispute resolution and can
result in a fair, just, reasonable answer for both you and the other party.
Settlement and compromise have long been favored in the legal system. In fact,
most cases that are filed in a court do settle. Only five percent of all cases
filed go to trial.
Expert determination, this is often used to
resolve issues or disputes of a specialist nature such as construction and is
one of the most informal systems of dispute resolution. Expert determination is
often used when there is a valuation dispute. For example, if an expert is to be used to
determine the dispute, the parties will agree this by contract and will agree
that the expert determination will be binding.
Expert Determination has the following merits,
i.
It is an economic way of finally resolving valuation disputes.
ii.
It is less expensive and a quicker and a less formal method of
dispute resolution.
Also an disadvantages of Expert Determination is
i.
The use of experts is much less tied to legal processes and
therefore it is more difficult to challenge the decision of an expert.
Consider, the method used to resolve your dispute will depend upon organizational
or personal needs with the nature of a particular dispute. You may want to
consult with an attorney to help diagnose which process best serves your
particular situation. Dispute decided on questions of law, resolved with
business principles or a solution found through other fair, yet practical,
means.
REFERENCES
- Agardy,
Peter (2009), 'Mediation and the insolvency practitioner,' Insolvency
Law Journal, Thomson Reuters, Vol 17. No.3, September, Pages 135-146.
- Cremin,
H. (2007). Peer Mediation: Citizenship and Social Inclusion in
Action. Maidenhead: Open University Press.
- Weele, Arjan J. van (2010). Purchasing and Supply Chain
Management: Analysis, Strategy,Planning and Practice (5th ed.). Andover:
Cengage Learning. Lewis, M.A. and Roehrich, J.K. (2009). Contracts,
relationships and integration: Towards a model of the procurement of
complex performance. International Journal of Procurement Management,
2(2):125-142.
- "Ardent
Partners Research - CPO 2011: Innovative Ideas for the Decade Ahead". "Public
contracts - Your Europe - Business".
Europa.eu. Retrieved 2013-06-16.
