A noted arbitration lawyer once remarked that his firm was the way it was (and thankful) because of construction disputes. While he expressed his sentiment in a light-hearted fashion, the truth of the current state of the construction industry shows the complex forces at play even at the moment that a project takes shape on the drawing board.
Already at this point, heads, egos and sensibilities interact in not entirely pleasant situations as the project is brought to fruition with contracts and signatures. The risk factor for construction disputes heightens when the first back-hoe rolls into the site or when the piling materials are set up.
Construction disputes are naturally occurring challenges in a project that involves the complex working and sometimes necessary precise orchestration of components like labor, equipment, tools and even unforeseen factors such as sudden market fluctuations and even natural disasters.
The impact of these disputes and even more importantly, the manner in which they are resolved can determine the outcome of a project and its future financial viability. Settling such disputes in a timely and precise manner is the objective of both the project leaders and the people involved, knowing that a positive outcome is a win-win situation.
Construction disputes today are normally resolved through a variety of channels and methods although there is a consensus that the single most effective strategy would be to find its root cause; to detect the core problem and apply a solution that involves the least amount of expense, time and collateral damage.
In settling construction disputes, the channels and methods normally follow a logical pattern flow based on the premise that one begins at the lowest and ultimately most direct method. If the dispute is not resolved there, then it takes another step and so on and so forth.
The first rung is through Step Negotiation which advocates a direct approach to settle the dispute. If within a prescribed time frame, the dispute is still not resolved, it is tackled by a Dispute Review Board. If for some reason, the parties still fail at an agreement, the problem can either go through a Mediation board or through legal Arbitration.
Companies today are employing a variety of new business strategies and techniques which allows them the prescience to detect areas where disputes are most likely to occur and thus employ necessary methods to prevent them.