Dispute resolution is specific to disputes that occur within the construction industry. There are many options for parties to resolve their disputes. Dispute resolution usually follows the following steps:
- The parties involved meet with a third party (mediator or arbitrator)
- The third party listens to both sites and helps work towards an agreement.
- Once the dispute is resolved, the parties are bound by the agreement reached.
Traditionally, the resolution of disputes took place through court. A formal process that involves lengthy pleadings, full disclosure of documents, witness statements, and expert reports, followed by a hearing.
Mediation is a form of dispute resolution that attempts to resolve disputes through commercial negotiations. The average mediation lasts one to two days and the parties can quickly resolve their dispute and reach an agreement.
Adjudication provides a temporarily binding decision that must be complied with until altered by a court. Adjudication is appropriate for recovering unpaid fees and for resolving claims around delay and disruption, an extension of time claims, and final account disputes. Adjudication is a positive dispute resolution as the intention is to resolve quickly and sufficiently.
Arbitration is a process where formal disputes are determined by a private tribunal, chosen by the parties. A dispute arising must be referred to arbitration when the contract comprises the arbitration clause, rather than going through the courts. Arbitration should be a cheap, fast option for dispute resolution with the outcome being binding to the parties.
The importance of dispute resolution is as follows:
- Avoiding litigation
- Resolving complex disputes
- Optimising productivity by resolving disputes quickly and efficiently.
- Negotiation
- Settlement – a process in which parties reach an agreement to resolve a dispute.
When choosing a dispute resolution method, there is greatly important when considering the dispute type, the parties involved, the jurisdiction, the time frame, the cost and the potential outcome.