Identifying focus areas to decode the decision to litigate contractual disputes in construction

Abstract

PurposeStrong and independent judiciary symbolizes transparency and impartiality in the dispute resolution process. However, litigation is often time-consuming and affects the working relationship between the disputants. In the construction context, where projects typically have a short life span of three to four years, dispute resolution through litigation induces unaffordable process delays. Despite the inherent challenges associated with litigation, it is observed that disputing parties resort to litigation. This behavior, called the litigation dilemma, ostensibly appears counterintuitive to rational decision-making.Design/methodology/approachThe study identifies 35 “decision to litigate” (DTL)-triggers from a review of the literature and court cases followed by expert interviews and groups them into thematic research domains using Exploratory Factor Analysis (EFA) followed by Confirmatory Factor Analysis (CFA).FindingsDTL studies in construction stands benefited through interdisciplinary research. “Presumptuous decision-making,” “construction project characteristics,” “milieu influence,” “interest in amicable resolution,” “positional focus” and “opportunism” are the six focus areas to decode the DTL in construction.Research limitations/implicationsThe study identifies factors that consolidate the knowledge from various fields with the substantive experience of construction professionals from across the world to help understand the dynamics behind the DTL in the context of contract-linked disputes in construction.Originality/valueThe findings from the domains of law, behavior, sociology and economics can help understand the above dilemma in the context of contractual disputes in construction. However, studies that explore the “decision to litigate” (DTL) contractual disputes in construction are limited, providing a vast scope for further research. The current study addresses a part of this gap.