In: Civil Engineering
For construction project risk and conflict management: Provide a comparison between Dispute Resolution Techniques and compare them based on their process time, cost, and legal aspects.
conflict in the construction industry is inseparable characteristics of the industry. disputes typically occur for the following reasons such as parties lack knowledge in construction laws such as conflict of law and juridical problems, the difference in project management practices and the difference in cost, duration, scope and risk. dispute avoidance and resolution techniques should be implemented to resolve conflicts with time and cost-saving.
in the world wide different types of dispute resolution methods are adopted, each one has its own advantage.
the methods adopted to resolve construction disputes are as follows:
Dispute Adjudication Board
it is a consensual process, it requires a willingness by both parties to attempt resolution by this method. If the relationship between the parties has broken down beyond this point then negotiation will not be possible. Negotiation can take many forms ranging from an informal chat or a telephone conversation between the parties or their lawyers to a highly structured and complex process taking place over an extended period of time. there are different negotiation style avoiding, competing, accommodating, compromising and collaborating.
Arbitration is a process where a third party who is independent of parties but may be selected by them, makes an Award determining the dispute. The Award is binding and can be enforced by the Courts. The process is controlled by the Commercial Arbitration Act. The proceedings are private and the Award is not formally published. parties may agree to submit a commercial dispute to arbitration, either at the time the dispute arises or by an arbitration clause in their agreement. Arbitration begins with a Preliminary Conference, followed by a hearing over several days or weeks. The arbitrator may publish Interim Awards as well as the Final Award which are binding on the parties.
other than litigation all other methods are referred to as an alternative dispute resolution techniques ADR. because of the other process offers disputants to determine the process they will use, the outcomes are satisfying and easier to comply with. More cooperation and less competition are involved in other processes. it helps to maintain the relationship between parties, which considered a key advantage in construction disputes. no parties wish to adopt litigation because of the increasing cost time taken to pursue a matter to trial the use of “ADR” techniques, particularly arbitration.
In this process, a neutral adjudicator decides on a resolution of a contractual dispute among the parties within a predetermined time limit. If stated in the contract, the decision is binding on the parties. The time limit for the decision is a very distinguishing characteristic of this process because a fixed time is set during which the adjudicator should make a decision. Adjudication thus becomes most appropriate in cases in which time is of the essence especially in payment decisions or when work is required to continue while awaiting the decision of a judge or arbitrator.
Dispute Adjudication Board:
it is also known as dispute resolution board or DRB) was developed by the international construction industry in response to the perceived inadequacy of arbitration to provide an efficient and cost-effective means of dispute resolution. the members are a panel of construction industry experts who work on a particular construction project and are familiar with the project’s construction contract and progress. By using a DAB, parties also avoid submitting construction claims (sometimes very technical) to a court and can instead rely on the board to settle matters in a timely manner. In international projects, it is most desirable to have DAB members of the same nationalities as the parties involved. the decision issued by a DAB is often advisory in nature and not binding, thus any of the parties can contest the decision by employing any other DRM.