Introduction to construction dispute resolution

Review of <i>Best Practice in Construction Disputes: Avoidance, Management and Resolution</i> by Dr. Paula Gerber and Brennan J. OngLexisNexis Butterworths, New South Wales, Australia; 2013; ISBN 978-0-409-33307-7; 493 pp.; $110.

Call for Papers: Special Issue on Alternative Dispute Resolution for the Engineering and Construction Industry

Dispute resolution plays an essential role in maintaining project continuity and legal certainty in the construction industry, where high-value contracts and technical complexities frequently lead to disagreements. In Indonesia, two primary mechanisms are available for resolving such disputes: litigation and arbitration. While arbitration is increasingly favored for its procedural flexibility and perceived neutrality, its actual effectiveness in the construction context—compared to litigation—remains underexplored in empirical research. This study aims to evaluate the effectiveness of arbitration as a dispute resolution method in Indonesia’s construction sector, particularly in comparison to litigation. It also seeks to identify the underlying factors that influence arbitration’s effectiveness and to examine the key challenges that hinder its optimal implementation. The research employs a mixed-methods approach, combining quantitative analysis of validated arbitration effectiveness indicators with qualitative insights from open-ended expert responses. Data were collected through structured questionnaires distributed to selected professionals in the construction industry, including lawyers, engineers, and contract administrators, who have experience both as claimants in arbitration proceedings and as observers or participants in court-based dispute resolution. These respondents are considered representative of stakeholders capable of assessing arbitration and litigation with informed judgment. The results indicate that arbitration is generally perceived as more effective than litigation, especially in terms of decision objectivity, procedural flexibility, and international enforceability. However, significant challenges remain, such as high arbitration costs, lengthy resolution times in complex cases, and limited public trust in arbitrator impartiality. These findings underscore the need for institutional improvements to enhance arbitration’s credibility and accessibility in Indonesia’s construction industry.

Building information modeling (BIM), through its data-rich digital representation of building elements, has revolutionized the architecture, engineering, and construction (AEC) industry. Facilitating the process of its implementation, several legal aspects of BIM have been discussed and standardized in the published contract systems, but legal provisions for dispute resolution through BIM are yet to be established. With more enhanced use of BIM, there is a need for a dedicated protocol for utilizing BIM in construction dispute resolution. This study aims to identify, analyze, and classify the potential legal aspects for integrating BIM into the construction dispute resolution process and thereby determine the corresponding provisions required in BIM-enabled contracts. Potential legal aspects were extracted through an analysis of published literature, including research papers, FIDIC contracts, and standard BIM contract documents. A questionnaire survey involving 140 respondents was conducted from which the 24 identified legal aspects were validated to be incorporated in BIM contracts as contract provisions. The proposed BIM-DRes framework maps the legal aspects and finalized contractual provisions with the phases of a construction project and highlights the main stakeholders associated with or affected by these aspects. The developed framework was further validated by three experts from the construction industry. This research explores this overlooked area and expands the body of knowledge on BIM-based dispute resolution, setting the ground for the extension of BIM-enabled contracts.

When we proposed this Special Edition of the Journal of Professional Issues in Engineering Education and Practice, we did it against a backdrop of the Housing Grants, Construction and Regeneration Act 1996 HGCRA in England and Wales, which introduced adjudication as a first-tier method of dispute resolution in all relevant construction contracts. This was a major step and extraordinary legislative intervention. It was also an opportunity for empirical study and data in an area dominated by anecdote and hearsay. Enforcement, procedural, and jurisdictional issues relating to adjudications or decisions made by adjudicators have produced a large body of case law. In addition, the statutory changes created the role of adjudicator and offered a new career path for many construction professionals. We knew that adjudication had become a statutorily imposed method of dispute resolution in the United Kingdom and we suspected in different forms in New Zealand, Singapore, several states of Australia, and the United States. We hoped that papers might be forthcoming that would explain the position around the world and add to the debate about construction dispute resolution. The response has been so strong that the special edition has been split into two special issues, and some papers have been carried over to the next special issue. The papers included in this special edition are mixed: some are research papers in the usual ASCE sense, some are research papers in the legal sense, and we hope that some will aid in answering that old question: What is different or special about construction? Chris Dancaster, one of the UKs most eminent adjudicators, sets the scene, providing the history before HGCRA and then an adjudicators perspective since. Adjudication under the HGCRA is a quick 28 days, enforceable, and a relatively cheap alternative to arbitration or the courts, covering all manner of disputes, and is available unilaterally at any time. Adjudication is temporarily binding. The substantive issues in dispute remain to be determined from first principles. The principles of natural justice due process to an American lawyer apply, but pragmatism is necessary in applying them. The adjudicator may get the decision wrong, but the courts will still enforce the wrong decision of an adjudicator. A dispute must exist for adjudication to be invoked. Sean Brannigan, a barrister the legal profession in the United Kingdom separates advocacy, carried out almost exclusively by barristers, from preparation, the province of the solicitor, describes UK legal developments via judicial intervention and its key battleground, natural justice. Peter Kennedy, an academic and leader of the Adjudication Reporting Centre at Glasgow Caledonian University, provides useful empirical data in the United Kingdom thus far. If the editors are guilty of anything, and that is denied in any event, it is of English empiricism. Conor Owens reports that dispute resolution in the construction industry in Ireland is about to change radically with the introduction of the new public works forms of contract. Traditionally, Ireland has had an image of being able to resolve disputes by the use of informal channels, and recourse to formal dispute resolution was seen as something to be avoided. The author asks if this will now change; he reviews the forms of dispute resolution that have traditionally been used in Ireland and details the new form of dispute resolution that is to be introduced. The new form of dispute resolution is unique and does not fit easily into any standard dispute resolution category. How will this dispute resolution procedure operate in practice, and how will it affect the ability of parties to resolve disputes? Paul Teo describes how adjudication was introduced into Singapore under the Building and Construction Industry Security of Payment Act 2004, which most closely resembles the regime in New South Wales under the Building and Construction Industry Security of Payment Act 1999. Based on the statistics currently available, it would appear that the Singapore regime has enjoyed some success thus far in achieving its policy objectives of expediting payment and improving cash flow within the construction industry. The author questions whether apparent early success can be sustained and improved upon. This may have wider implications, including a possible reduction in the use of litigation and arbitration proceedings for resolving construction payment disputes in Singapore. John Hinchey and Jeffrey Perry describe the United States as under certain dynamics or tensions inherent within, and associated with, all construction disputes that continue to resist efforts to speed up dispute resolution processes. These tensions must be reconciled or taken into account before any fast track or adjudication-type process will be generally accepted in the U.S. cons

The construction industry has been a paradoxical leader in both dispute occurrences and dispute resolution systems for many years. This study assessed the construction dispute resolution mechanism in Ethiopian Somali Region Road Construction Industry. It has identified the causes that lead to construction dispute in the road sector; determined the most frequent causes of the dispute; and analyzed its current dispute resolution mechanisms. Results show to have five major categories of disputes which are design-related, contractor-related, owner related, contract-related, and external factors ranked from first to fifth, respectively. The Dispute Resolution Mechanisms currently used in the road construction industry of the Ethiopian Somali region are an Amicable Settlement (Negotiation), DRE, Arbitration (Litigation), and “others” not disclosed by respondents. ADR is to a certain extent, effectively used in contracts in the construction industry. Negotiation is initially most frequently used in resolving disputes in road construction projects in Somali Region. However, parties cannot resolve the issue through Negotiation thereby resorted to Arbitration (Litigation). Arbitration is the final stage of dispute management in the road construction sector and arbitration proceedings resemble to regular court litigation. Various but specific recommendations were forwarded to major construction stakeholders to minimize or avoid disputes. Such as disputes can be reduced by checking that the contract documents are in place. Avoid making general statements, and instead set out a complete list of specifications, drawings, questions and answers, and others that apply to the project.

Mediation can no longer be said to be a new phenomenon for the resolution of construction disputes. It has been used, in the commercial context, for the resolution of disputes in a wide range of industry sectors both before the commencement of and during formal proceedings. There are some useful data in respect of the use and effectiveness of mediation in the construction industry and court-annexed mediation services, however these are mainly anecdotal. In order properly to assess the effectiveness and cost savings associated with mediation in the construction industry, an industry-based survey was developed between King’s College London and the Technology and Construction Court. This paper explores the results of that survey which indicate that the court appears to be dealing with fewer disputes which relate to changes in the scope of works, project delays and site conditions than those generally arising 10 years ago. The incentives to consider mediation provided for by the Civil Procedure Rules appear to be effective; and that those advising the parties to construction disputes now routinely consider mediation to try and bring about a resolution of the dispute. It is clear that mediation has transformed from a novel idea to an indispensable tool for construction litigators.

A Timeless Motto for Dispute Resolution: “Prevention Is Better Than Cure”

Arbitration is a popular dispute resolution method in the construction industry in Indonesia because the process is fast, efficient, and the results are final and binding. However, attempts to retest or annul arbitral awards in courts often threaten the principle of finality. This study aims to analyze the legal basis for reviewing arbitral awards in Indonesia based on Articles 70-72 of Law No. 30 of 1999 concerning Arbitration and Alternative Dispute Resolution, as well as its impact on legal certainty and efficiency in resolving construction disputes. Through a normative juridical approach and case studies, this study found that courts often annull arbitral awards on the grounds of forged documents, new evidence, or fraud (Hansen, 2019). Examples of cases such as PT. Hutama Karya vs PT. Krakatau Bandar Samudera show that annulment by the district court prolongs dispute resolution and adds to costs, which highlights the weakness of the arbitration system in Indonesia and can reduce trust in it. The study concluded that legal reform is necessary to limit the grounds for reviewing arbitral awards. Indonesia is also advised to establish a special arbitration court or a judge of construction dispute experts to increase legal certainty. Training and certification of arbitrators is necessary to reduce the potential for award errors, so that arbitration can be optimal as an effective and efficient method of dispute resolution.

In e-commerce transactions in cyberspace it is possible occur a dispute as well as dispute occur within a legal relationship which is done conventionally. The more numerous and widely distributed activities of trade, then the frequency of occurrence of dispute be high and it means there'll be a dispute that must be solved. Dispute resolution itself basically qualifying to dispute resolution by peaceful and dispute resolution in adversarial. Resolving disputes peacefully is better known with concensus . While the dispute resolution in adversial, better known as resolution of disputes by a third party who is not involved in the dispute. The form of peaceful dispute resolution is negotiation, mediation and conciliation, while resolution form adversial is through the courts or the arbitral institutions. Dispute resolution in accordance with the philosophy of the inception of e-commerce is through negotiation, mediation, conciliation and arbitration. Keywords: e-commerce, dispute, dispute resolution, alternative dispute resolution

Construction projects usually are susceptible to conflicts because of their complexity. Additionally, the involvement of different stakeholders pursuing different aims and implementing them by different means, often results in disputable situations that must be solved. The existence of several dispute resolution procedures with various advantages and disadvantages makes it difficult to select the most suitable one for solving the particular conflict. Not every method seems appropriate for resolution of each type of dispute. Litigation may take a long time and incurs substantial cost. However, conflict parties seldom choose alternative dispute resolution (ADR) procedures such as adjudication, mediation and conciliation. Based on literature research and the analysis of several surveys, the authors identified a massive knowledge deficit of construction industry regarding the details of ADR procedures. The authors conclude that deeper knowledge about pros and cons of the various dispute resolution methods can help construction companies with their decision for a suitable way of conflict settlement. The paper provides information about a decision supporting chart for choosing the appropriate dispute resolution measure. That decision supporting tool, developed by the authors, primarily shall assist smaller and mid-size construction companies, normally not having easy access to legal advice, in deciding for a dispute resolution strategy.

Construction projects usually are susceptible to conflicts because of their complexity. Additionally, the involvement of different stakeholders pursuing different aims and implementing them by different means, often results in disputable situations that must be solved. The existence of several dispute resolution procedures with various advantages and disadvantages makes it difficult to select the most suitable one for solving the particular conflict. Not every method seems appropriate for resolution of each type of dispute. Litigation may take a long time and incurs substantial cost. However, conflict parties seldom choose alternative dispute resolution (ADR) procedures such as adjudication, mediation and conciliation. Based on literature research and the analysis of several surveys, the authors identified a massive knowledge deficit of construction industry regarding the details of ADR procedures. The authors conclude that deeper knowledge about pros and cons of the various dispute resolution methods can help construction companies with their decision for a suitable way of conflict settlement. The paper provides information about a decision supporting chart for choosing the appropriate dispute resolution measure. That decision supporting tool, developed by the authors, primarily shall assist smaller and mid-size construction companies, normally not having easy access to legal advice, in deciding for a dispute resolution strategy.

In the Architecture, Engineering and Construction (AEC) industry claims arise frequently, often resulting in disputes. Claim management should be efficient to prevent claims from escalating into disputes, and if disputes are still unavoidable, they should be resolved without delay for the construction process to resume. First, by conducting a bibliometric review, this paper attempts to investigate the literature on construction claims and dispute resolution practices by employing the Scopus database and VOSviewer to retrieve and analyze related sources. The overall trend of research by country, source, and authors is detected, and the emergence of novel technologies such as BIM, blockchain, and smart contracts appearing after 2020 concerning the investigation into construction claim management and dispute resolution was identified. Second, a content analysis on the most recent publications published between 2020 and 2022 was undertaken, indicating six main research themes that represent current research trends. The employment of novel technologies to enhance claim management and dispute resolution practices in the AEC sector is identified, as well. Finally, in order to assist construction professionals and researchers in their work to address construction claims and disputes more efficiently, potential research directions are proposed.

The present chapter seeks to ascertain, from the standpoint of a civil lawyer, the practical implications of good faith in the resolution of transnational construction disputes submitted to international commercial arbitration. For that purpose, the first section sets out the potential sources of good faith that may be used by arbitral tribunals in the resolution of transnational construction disputes. It is essentially submitted in that respect that the principle of good faith may be enshrined in various instruments such as national laws, express contractual provisions, as well as transnational rules and principles deriving from non-state sources. The second section subsequently focuses on the practical implications of good faith in relation to the resolution of international construction disputes by arbitral institutions and in the shaping of contractual tools and arrangements developed and used in the construction industry.

Editorial