Disagreements are not uncommon in the construction industry. Although a dispute can occur over a number of things, there are certain causes that are more common than others.
When the parties cannot resolve a dispute on their own, there are three resolution methods to choose from that can help figure things out.
Common causes of disputes
Issues regarding contracts are common. These disagreements may be between the client and company, between the contractor and subcontractor or between other parties. Changing conditions and the lack of communication regarding them is also a common cause of arguments. Other common causes include:
• Highly complex projects
• Inadequate project management
• Payment delays
• Schedule delays
• Lack of clear and consistent communication
Dispute resolution methods
The Harvard Law School Program on Negotiation discusses the three main methods used to help resolve disputes. Most people are aware of litigation, as it is the most familiar. This consists of the attorneys, who are representing the disputing parties, presenting evidence, witnesses and arguments to state their cases. A judge or jury listens to both sides and makes a decision. Litigation can be effective, especially in more complex cases, but it is costly and time-consuming.
To resolve issues quicker and with less stress, some people choose alternative methods. One is mediation, in which a mediator works with each side to get them to communicate with each other and come up with an agreement. A mediator can help each side work through issues and solve conflicts, but as a neutral party, he or she cannot make any decisions.
Arbitration falls in between the other two methods. It involves a neutral party, the arbitrator, but this person also makes a final decision after hearing attorneys from both sides present evidence. This is a less formal process than litigation, although the arbitrator’s decision is binding.