Three Methods For Resolving Construction Disputes

Most construction disputes arise between contractors, employers or sub-contractors and main contractors. Here are five of the most basic mediation methods and the pros and cons of each method.

Contract administrator – Often a contract administrator will be named in the contract and will be the first person that needs to be contacted when a dispute occurs. The contract will also state the extent of the powers of the administrator and whether their decision is binding. Contacting the contract administrator is a quick, low-cost way of solving a construction dispute. However, the administrator’s opinion is binding, therefore parties may need to look at other options depending on their dispute.

Negotiation – Negotiations can be conducted in a number of ways, for example, negotiation can be done over the telephone, by correspondence, at a meeting or through mediation. Lyle Charles says that most negotiations are expressed ‘without prejudice,’ which means that any admissions, offers or counter offers cannot be mentioned in other proceedings. However, to ensure that this is the case, parties should sign an agreement before commencement. Which means that any admissions, or offers and counter-offers, made cannot be mentioned in later proceedings.

Adjudication – All parties have a right to an adjudication. However, this method of dispute resolution will be binding and often enforces an immediate decision. Most construction consultants advise that an adjudicator decision can be overturned in later proceedings.