What is Dispute Resolution?
Dispute resolution refers to processes and techniques used to resolve conflicts and disagreements between parties. This includes negotiation, mediation, arbitration, and litigation. In the construction industry, effective construction dispute resolution is essential for settling disputes fairly and keeping projects moving forward.
Why is Dispute Resolution Important on Construction Projects?
Construction projects involve many different stakeholders – owners, contractors, subcontractors, suppliers, etc. With so many involved parties, disputes inevitably arise due to miscommunications, unclear contract terms, schedule changes, unexpected costs, and more. Dispute resolution is important in construction projects because it allows conflicts to be settled fairly and projects to keep moving forward. Here are some other key reasons proper dispute resolution is so important for construction projects:
Avoids Costly Delays When conflicts bring work to a standstill, costly project delays follow. Dispute resolution gets parties communicating constructively again so work can resume in a timely fashion.
Preserves Working Relationships Construction is a relationship-driven industry. Unresolved conflicts can fracture important business relationships. Dispute resolution allows parties to maintain mutually beneficial partnerships.
Reduces Expensive Litigation Lawsuits should be a last resort. Mediation and arbitration settle disputes faster and more affordably than courtroom litigation.
Upholds Positive Reputations Construction companies rely on stellar reputations to win new business. Staying out of public disputes preserves reputations.
Maintains Site Safety Unaddressed disputes can lead parties to cut corners or make unilateral changes, compromising safety. Dispute resolution facilitates collaboration and communication on site.
How are Construction Disputes Resolved?
Common dispute resolution methods in construction include:
- Negotiation – Parties discuss issues directly to find a mutual agreement.
- Mediation – An impartial mediator helps parties communicate to find a solution.
- Arbitration – Disputes are heard and resolved by an experienced arbitrator.
- Litigation – As a last resort, legal action through the court system.
Dispute resolution processes like mediation and arbitration allow for conflicts to be settled fairly and projects to keep moving forward. By maintaining schedules, budgets, relationships, reputations, and site safety, dispute resolution delivers major value at every phase of a construction project.
Contact KJ Taylor Consulting Ltd. for assistance with implementing effective dispute resolution procedures for your next construction project.