Construction projects are complex undertakings that require the coordination of several stakeholders, including owners, contractors, subcontractors, architects and engineers. As a result, disputes often arise during construction. Dispute management is the process of resolving these disputes fairly and efficiently. The first step in dispute management is to identify the cause of the dispute and the dispute resolution process. As one of the leading disputes management solutions providers, we share useful insights on what makes dispute management challenging.
Common causes of disputes include:
Delays
Delays are common in construction and they can often lead to disputes among the various parties involved in a project. Owners, general contractors, and subcontractors all have their schedules to keep and a delay on one task can often cause a domino effect that throws the entire schedule off. In some cases, delays are caused by legitimate issues such as material shortages or accidents.
Workmanship issues
A contractor’s job is to perform a specific task agreed upon by both the contractor and the party commissioning the work. If the contractor does not meet the expectations or standards of the project owner or general contractor (GC), they may request that the contractor fix or finish the work. Payment is often withheld until the work is completed to satisfaction. These disputes often arise due to different interpretations of what was agreed upon.
Non-compliance
If a contractor, sub-contractor, or any other party does not comply with their contractual obligations, the other stakeholders can seek recourse, leading to disputes.
These are just a few of the many causes that can lead to disputes in the construction industry.
Here are some of the challenges in dispute management:
1. Failure to actively manage claims:
Knowing about your position at the time a dispute arises is one of the most effective ways to have quick dispute resolution. Many projects rely on what you would call “passive” systems of claim management. These processes typically involve relying on project management databases as the sole repository for all claim documentation, with assessment only taking place only after the trigger event. This method is inefficient and can easily add weeks or even months to the resolution process. By taking a proactive approach and knowing your position from the outset, you can avoid these delays and keep your project on track.
2. Poor management of scope:
One of the most challenging areas of the construction drafting process is the interface between different scopes of work. For example, a classic interface is a problem where it passes from construction to the commission. These types of interfaces are all over construction contracts. It is quite difficult to manage all these interfaces.
3. Facts are missing or are inaccurate
For good decisions to be made around disputes, it is important that facts are accurate. However, one common problem in construction projects is the absence of facts and anecdotal evidence. When unsupported facts are picked up, the claims cannot be properly assessed. This can delay dispute resolution.
4. Poor strategies in place:
When strategies inconsistent with the parties’ contractual obligations are deployed, they can make it extremely difficult to determine the clear division of responsibility. This can lead to arguments, making it harder to resolve the dispute.
How can we help your business with the dispute resolution process?
At Contract Square Pvt Ltd, we have dispute resolution experts who can identify claims, review claims, build concrete evidence and advise you what to do. Our experts have years of vast experience and comprehensive technical knowledge. They can carry out negotiations on your behalf to ensure the financial viability of your project. To know how we can help your company, mail us at enquiries@contractsquare.co or call +91 9903023893.
