Causes of disputes, factors affecting dispute resolution and effective alternative dispute resolution for Sri Lankan construction industry

Abstract

Construction industry is typically vital to the economy of any country. It appears that on-going large-scale building and infrastructure projects in Sri Lanka have attracted numerous international contractors. Moreover, in Sri Lanka, there are several foreign investors, and to-be-funded mega government projects at their inception and initial stages, increasing competition which has already been fierce. However, these massive projects under various stakeholders with different interests usually initiate conflicting claims, if not resolved, will likely lead to disputes, and filing law suits. Once a dispute is crystallized, there are commonly used alternative dispute resolution (ADR) mechanisms. However, the causes leading to the claims to form a dispute, and the effective ADR methods are largely dependent on the perspective of the stakeholders. This research aims to identifying those dispute causes, factors affecting the selection of dispute resolution methods, and the most effective ADR method in the perspective of different parties to construction projects in the Sri Lankan construction industry. First, an extensive literature review was carried out to identify the ADR context in Sri Lanka. Second, a comprehensive questionnaire survey was conducted involving professionals representing various stakeholders such as contractors, clients and consultants. Survey responses were then analyzed using special purpose statistical software (SPSS). To determine the statistical significance difference among stakeholders' perception, Kruskal-Wallis H test was used with a 90% confidence level. This research thus provides additional insights into causes of claims and ADR selection from different perspectives.