Construction projects are inherently complex, involving multiple stakeholders, significant financial investments, and tight schedules. Despite meticulous planning, disputes are often unavoidable due to the dynamic nature of construction. Understanding the life cycle of a construction dispute from an expert’s perspective is crucial for effective resolution and to minimise disruption. This article explores the stages of construction disputes, the role of experts, and strategies for resolution.

1. Pre-Dispute Phase: Prevention and Risk Management

The foundation for avoiding disputes lies in the pre-dispute phase, where proactive measures can mitigate potential conflicts. In my experience, risk management and clear communication during this stage often lead to more successful projects.

• Risk Identification and Allocation: Parties should identify potential risks early and allocate them appropriately. This sounds simple, yet often this is something that is overlooked or poorly communicated. As examples: Who owns the risk in material cost fluctuations? How does the contract deal with that? Who deals with ground conditions?
• Early Identification of Risk or Problems: As a quantity surveyor, I would complete tens of CVRs (Cost Value Reconciliations) a month. Put simply, if you are 50% of your way through the schedule, yet have burned 75% of the way through the costs, then we have a problem. When involved in disputes it appears that often the skill of the CVR process has been lost, as disputes or the extent of the sums involved in disputes often come as a surprise to the parties.
• Documentation: Max Abrahamson stated: “A party to a dispute, particularly if there is an arbitration, will learn three lessons (often too late): the importance of records, the importance of records, the importance of records.”^[1] This was published in Mr. Abrahamson’s book “Engineering Law and the ICE Contract” … in 1965! It is possibly worth a separate article on why 60 years down the line, we are not learning this vital lesson in the construction industry. Comprehensive documentation of agreements, timelines, and expectations is essential. As one expert often instructed in arbitration and litigation cases, such records are vital in establishing a robust claim or defence.

2. Dispute Emergence: Identifying the Problem

Disputes often arise due to delays, payment issues, quality concerns, or miscommunication. Experts play a critical role in identifying the root cause of the conflict and assessing its impact.

• Common Causes of Disputes:
  • Delays: Weather conditions, supply chain disruptions, or scope changes can lead to scheduling conflicts and additional costs. Clear timelines and regular updates can help mitigate these issues.
  • Payment Disputes: Unpaid invoices, budget overruns, or disagreements over the costs of variations or changes are common. Transparent payment terms and financial records are vital to avoid these conflicts.
  • Quality: This is becoming a concern in industry and something seen often. Defective workmanship and substandard materials are commonplace. Low margins and intense competition are driving behaviors to cut corners, restrict investment in training of people, and limit procurement of quality materials. Increasingly, the checker or clerk of works does not seem to have a role anymore, as such issues would be flagged and resolved prior to disputes occurring.
• Role of Experts: Experts provide technical analysis to determine the validity of claims. Our objective assessments help parties understand the technical aspects of the dispute and form a basis for resolution. Construction disputes increasingly require multiple expert disciplines, such as delay analysis (time), quantum assessment (cost), technical evaluation (cause), and forensic accountancy (damages), to comprehensively address the complex nature of claims.

3. Dispute Resolution: Strategies and Processes

Once a dispute arises, the focus shifts to resolution. Experts are integral to this process, offering technical insights and facilitating communication between parties.

• Negotiation and Mediation: These are often the first steps in resolving disputes. Mediation involves a neutral third party who facilitates discussions and helps parties reach a mutually acceptable solution. Experts may function as mediators or provide technical support during negotiations.
• Arbitration: When negotiation fails, arbitration can be seen as a preferred alternative to litigation. It involves presenting the dispute to a neutral arbitrator who issues a binding decision. Experts often provide testimony or reports to support the arbitration process.
• Litigation: As a last resort, disputes may escalate to litigation. This process is costly and time-consuming, but it provides a definitive legal resolution. As experts, we play a crucial role in presenting evidence and supporting the case in court.

4. Post-Resolution Phase: Learning and Prevention

What we often do not see after resolution of a dispute are the essential actions of analysing the causes and implementing measures to prevent future conflicts. Organisations should consider the following preventive measures:

• Documentation and Communication: As discussed, organisations should stress the importance of maintaining accurate records and fostering open communication throughout the project lifecycle. These help identify potential issues early and ensure that all parties are aligned. I learned the following advice early in my career: “If you are going to take a bath, jump in.” Get issues out in the open, discuss with colleagues and clients ways to mitigate or resolve issues, and tell your CEO if they are going to take a hit. All these steps are challenging to navigate, but they are effective in bringing issues to light and taking proactive measures to address them.
• Continuous Improvement: Learning from past disputes is crucial for improving processes and avoiding similar issues in future projects. Experts can help organisations develop strategies for risk management and dispute prevention.
• Training: We often see that training budgets are cut due to low margins on projects. It is a false economy—spend some money training people in contracts, programming, quantity surveying, and in understanding construction technology.
• Early Engagement: Involving experts during the planning and procurement phase or during the live construction stages can help prevent disputes. Experts can advise on the operational aspects of contract terms, risk management, and technical requirements. Even during the pre-dispute action, it is helpful to have an expert on board, as an advisor or instructing as an expert.

Conclusion

The life cycle of a construction dispute highlights the importance of proactive measures, effective resolution strategies, and the role of experts. By understanding the stages of disputes and leveraging expert insights, construction professionals can navigate conflicts and ensure project success. Whether through risk management, mediation, or litigation, experts provide the technical expertise and impartiality needed to resolve disputes and foster collaboration among stakeholders.

The construction sector is often seen as behind the curve, from the technology used in projects to how experts operate. I see this gradually evolving. Experts, AI, and eDiscovery software are already vastly improving the document search and analysis functionality, saving time and expense in producing expert reports. Experts can get a timeline and heatmap summary of the key components of the case in less than an hour after uploading 100k+ documents. In the future, experts may be able to use AI, 4D, and scheduling software to produce comprehensive expert analyses, leaving the experts more time to interpret and opine rather than hand cranking their analyses.

The crucial aspect is what is in the records, records, records, but we have come a long way in the analysis of them since Mr. Abrahamson’s famous quote.

The views and opinions expressed in this article are those of the authors.

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