Mandatory Use of ADR in Construction—A Fundamental Change from Voluntary Participation

Abstract

Resolving disputes is undoubtedly part of the daily activities of construction professionals. Construction disputes typically have both technical and legal dimensions. For this reason, courts may not be the most appropriate forum for settling construction disputes. Alternative dispute resolution techniques is a generic description used to identify a wide range of resolution processes that aim to resolve disputes speedily and cost efficiently. In fact the acronym ADR can also stand for amicable dispute resolution to reflect these desired outcomes. The ADR movement in construction has gathered momentum since the 1980s and is now widely practiced in the construction industries of many countries. Notwithstanding this wide adoption, the geographical differences attributed to cultural factors, maturity of the industry, and prevalent legal systems in force are influencing the use of ADR practices. Furthermore, participation in ADR techniques remains largely voluntary, and the legal ramifications arising from them remain uncharted. The associate editor of the Legal Affairs Section, the editor of JPI, and ASCE are to be commended for their vision in promoting this special issue on Legal Aspects in Alternative Dispute Resolution. From its very inception, ADR has been a form of assisted negotiation, in which settlement of a dispute is facilitated by a neutral third party. A notable example is mediation, whereby the mediator assists the disputants in coming to an agreement through shuttle diplomacy. Nevertheless, other ADR forms that are more adjudicatory have emerged and even acquired statutory mandates in recent years. This special issue includes six papers. In a forum paper, Jones provides a timely summary of the forms of dispute resolution available for use in construction. The dispute resolution processes are categorized in three groups: administrative issue resolution, nonbinding nature dispute resolution, and binding nature dispute resolution. Notably, there is no hard and fast rule on choice; nonetheless, Jones points out that ADR can be an effective and efficient method of resolving disputes if used in the correct way and in the correct situations. More specifically, the nature of the dispute is the decisive factor in choice. The summary of Jones on the forms of dispute resolution suggests a trend of imposing statutory adjudication in several jurisdictions. The United Kingdom is a notable example because of the enactment of the Housing Grants Construction and Regeneration Act in 1996. Among other measures used in addressing typical problems in construction contract practices, parties to a construction contract, under the act, have the right to refer disputes to adjudication. Kennedy, through his Adjudication Reporting Center, collected valuable data on the use of adjudication in the U.K. construction industry since 1996. A decline in the number of mediation cases was noted, as well as an increase in the use