Dispute Resolution

Dispute Resolution - Which Process to use?

Whatever formal process is adopted it is worth remembering they all have one thing in common. You are simply asking an impartial third party to decide your dispute. The procedures may be very different but whichever process is adopted, it amounts to no more than asking someone else, be that a judge, arbitrator, adjudicator, dispute board or expert, to conclude on the merits of each parties case, who is or isn't entitled, (in part or in whole), to whatever it is in dispute.

There are many formal processes available today for the resolution of construction disputes. As time and money spent by staff preparing disputes can always be better spent on other business activities and employing third parties in advising and assisting can be expensive, (the cost of which may not be wholly recoverable even if you are successful), the correct choice is critical. It could be the difference between an efficient and cost effective solution or becoming embroiled in a long drawn out process where costs escalate disproportionately to the sums in dispute.

The process to follow in the first instance is to talk and negotiate. If this fails a formal procedure will normally be set out in the contract. However, it should not be forgotten that a contract can be varied by the agreement of both parties. If the process set out in the contract is not best suited to the dispute that has arisen, then by agreement that process can be changed, for example maybe try mediation. Nobody has a crystal ball, neither party can foresee at tender or on day one of a contract what type of disputes may arise or need to be avoided. The contractual dispute resolution clauses should be viewed as a fall back position if agreement of how to resolve each dispute can not be obtained.

The dispute resolution process should be matched to the dispute, not the other way round.

Historically arbitration has been the process of choice for resolving construction disputes. In international disputes arbitration is still the favoured option. Today however there are a number of alternative dispute resolution (ADR) processes which can be utilised.

Deciding on the correct course of action to resolve a dispute is therefore a key decision which requires careful consideration. The decision should initially be taken by both parties through discussion and negotiation at tender stage. Unfortunately it is often the case at this point in time that neither party wishes to openly contemplate the possibility of a dispute arising and so the matter is paid very little, if any, attention. But even if proper consideration has been given at the tender stage, it may be necessary to re-evaluate the options after the dispute has arisen.

Please use the menu to the right to find out more about each available dispute resolution process.