Various Types of Alternative Dispute Resolution Methods in the Construction Sector
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Construction projects involve many parties other than the main parties to the contract. Employers, consultants, main contractors, subcontractors, and suppliers are some of the main parties involved in any construction project. Other than them, there are many other parties involved, depending on the scale and scope of the project. With so many stakeholders involved and the complex nature of work, even well-planned projects can end up with disputes and issues.
Why do construction disputes occur ?
Construction disputes arise due to disagreements between the parties. Some of the common reasons for construction disputes are:
- Errors and omissions in contract documents
- Change in the scope of the project
- ailure of the owner, contractor, and/or sub-contractor to understand or comply with the terms of the contract
- Cost overruns
- Delay in supply of materials by the ownerPayment delays by the owner
Different forms of dispute resolution process are:
- 1. Negotiation: Negotiation is the most informal method of dispute resolution. Only the parties to the contract and their designated negotiators take part in this process. The goal of negotiators should be to resolve disputes on terms that are agreeable to both parties. The good part about negotiation is that it promotes both the parties’ interests and at the same time maintains parties’ business relationship in which they invested time, money and effort. Moreover, it is the least expensive method of dispute resolution. Even if negotiations fail, it gives both the parties an opportunity to identify the actual points of disagreement and know what the other party’s stand on the issue is.
- 2. Mediation: In this process, the both parties choose a neutral person to act as the mediator. The job of a mediator is to help both parties arrive at a settlement of the dispute. A mediator is not a negotiator and, thus, does not represent the interest of either party. Though mediation is not a legally binding method, it can be an effective way to resolve the dispute before either parties move the court.
- 3. Arbitration: When parties are unable to come to a resolution, they often prefer arbitration. The parties select a neutral person with relevant experience as an arbitrator. In some cases, the number of Arbitrators are three. An arbitrator conducts a hearing the way it is done in a trial in court. The decision of the arbitrator is legally binding. One of the major benefits of choosing arbitration is that the process is fast and cost effective as compared to Court litigations.
- 4. Litigation: When all methods of alternative dispute resolutions fail to work, either party can move the court. It is legally binding and enforceable, though it can also be appealed. In India, resolving disputes through litigation can be costly and long drawn.
How can Contract Square Pvt Ltd, a leading construction claim consultant, help your business resolve construction disputes
We have a team of highly experienced and qualified dispute resolution experts who carry out Contract review for your business so that the financial viability of the project can be maintained. From identifying the root cause of claims to building concrete evidence, from advising and assisting in mediation and Arbitration proceedings, we, as a leading claim consultant, are there to support our clients in every step. In case the dispute reaches the court of law, our techno-legal team fights for our clients’ rights with solid evidence and documentation which can sustain judicial scrutiny. To know how we can help your construction company, call us at 9051739355.
