Negotiation as an ADR Technique in the Sri Lankan Construction Industry

Abstract

The construction industry is complex, and disputes are common in this industry. One primary method used in dispute resolution in the Sri Lankan construction industry is negation. Negotiation is considered a cost and time-effective alternative dispute resolution method. However, the contracts formed based on Construction Industry Development Authority (CIDA) do not include negotiation as a dispute resolution (DR) method. Therefore, this study aims to find the reasons for the failures in dispute negotiation and develop a framework to improve dispute negotiation in the Sri Lankan construction industry. There were two methods applied in this research. Because to avoid being based on a limited set of construction industry-related disputes. Five interviews were conducted by construction industry professionals to organize the data collection through documentaries and selected construction industry professionals are one projects director, one Chartered quantity surveyor, one engineer, one project manager, and one quantity surveyor to cover management level, chief level, and senior level. Then 250 claims were collected relevant to design changes, payment-related issues, time-related issues, documentation, and work quality. Out of those five types of claims, the majority of payment and time related disputes were resolved unsuccessfully through negotiation. Reasons for those disputes to fail in resolving through negation are negotiation outcome do not have statutory powers, the attitude of disputing parties, lack of negotiation skills, lack of trust towards negotiation, and less documentary information. The study recommends CIDA improve negotiation practices in the Sri Lankan construction industry by providing proper training, including negotiation as a compulsory DR, provide awareness programs to the industry stakeholders on dispute negotiation and its benefits. KEYWORDS: Negotiation, disputes, construction industry, Sri Lanka