Construction Dispute Resolution Research Articles

THE DEVELOPMENT OF ANATOMY OF CONSTRUCTION DISPUTE

The advancement of the construction industry in Indonesia is often not accompanied with adequate infrastructure system, especially in terms of regulations and legal system. The enactment of Law no 80–1999 has contributed to the expansion of construction market by allowing the private sector, including those from overseas, to play bigger roles in the industry. Although strongly acknowledged by stakeholders in the industry, the progress made by the government and the practitioner in the industry to response to the needs for more appropriate actions to cope with this ever increasingly complex system has been very slow. The dynamic of the construction industry in the region has changed the formerly rigid government-dominated construction sector to become an intricate one. The impact of such dynamic in the industry has been apparent. In particular, construction disputes have been experiencing changing in the dynamic of the way the disputes were handled; from the traditional litigation approach toward modern alternative dispute resolution mechanism. While litigation remains the dominant construction dispute resolution mechanism, nonlitigation approaches such as arbitration and dispute review board are beginning to gain recognition in industry. This paper presents a study on the development of anatomy of construction dispute in Indonesia, which will serve as a framework for analyzing the dynamic of construction disputes in Indonesia. Such a framework will help to identify factors affecting construction dispute mechanism, from the initiation of disputes to the resolution. The anatomy is developed based on analysis of construction dispute cases that have been recorded in judicial courts as well as from Indonesian Arbitration Board.

Adding peacekeepers to the debates of critical liberal peacebuilding: new insights from the perspective of peacekeeping training in Africa

This article expands upon the theoretical discussions within the critical liberal peacebuilding scholarship through the introduction of peacekeeping training to these debates. As an under-explored aspect of international peace efforts, the article, while guided by the overall question of whether or not the concepts of ‘hybrid peace’ and ‘recourse to localism’ can be operationalised, argues that bringing the peacekeepers and their training back in is critical to these debates. Exploring the training efforts of the Kofi Annan International Peacekeeping Training Centre (KAIPTC) and the African Centre for the Constructive Resolution of Disputes (ACCORD), I show that these training providers are faced with the overwhelming challenge of addressing the complexities of today’s peace support operations, while providing scope for active learning methods. Based on the training realities on the ground at KAIPTC and ACCORD I draw a picture of what these realities reveal with regard to the obstacles on the path of operationalising the concepts of ‘hybrid peace’ and ‘recourse to localism’.

Review Statistics and Performance of the Journal of Legal Affairs and Dispute Resolution in Engineering and Construction

Review Statistics and Performance of the <i>Journal of Legal Affairs and Dispute Resolution in Engineering and Construction</i>

Assessment of Construction Dispute Resolution in Ethiopian Somali Regional State Road Projects: A Case Study on Road Projects in the Region

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.

Construction Dispute Resolution in Ireland during Recession: Best Practice for Small-to-Medium Enterprises

AbstractThe purpose of this paper is to identify best practice construction dispute resolution in small-to-medium enterprises (SMEs) within Ireland during the recent economic recession. A sequential mixed methodology encompassing a detailed literature review, case studies, and questionnaire survey is adopted, with results analyzed using both exploratory (data reduction) and confirmatory (structural equation modelling) factor analysis. The results show that four core aspects should be adopted by SMEs to achieve best practice construction dispute resolution in recession: third-party intervention, adoption of a streamlined process, proactive party characteristics, and the use of legal professionals. Numerous studies of this subject have been conducted; however, no research has been done to date documenting best practice in construction dispute resolution within SMEs, particularly in light of the economic recession in Ireland. It is clear that dispute resolution in Ireland is currently undergoing fundamental ...

Comparison of the effects of litigation and ADR in South-East Queensland

Alternative dispute resolution (ADR) methods, such as arbitration, are often used instead of litigation to resolve construction disputes, as industry folklore considers litigation overly expensive and time-consuming. But is this actually the case? Do the people most involved in construction dispute resolution agree? What are the real advantages and disadvantages of using litigation or ADR? When, if ever, is litigation the most appropriate way of resolving construction disputes? To answer these questions, this paper first provides a review of the literature on the use of litigation and ADR for construction dispute resolution. This is followed by the results of a survey of construction and legal personnel with moderate to extensive experience of dispute resolution in the Australian South-East Queensland construction industry. The main results of this are that, in addition to litigation being more expensive in money and time than ADR methods, the nature of the existing relationship between the parties has an important effect on the resolution process, what happens after an unsuccessful ADR and, if adversarial, is more likely to lead to litigation. The results are then validated and verified by one of the most experienced practitioners in claims and disputes in the whole of Australia.

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

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

Study of a User-Centered CBR R5 Structure for Construction Dispute Resolution

Study of a User-Centered CBR R5 Structure for Construction Dispute Resolution

Is Mandatory Alternative Dispute Resolution a Panacea to Attain Effective Payment Dispute Resolution?

Alternative dispute resolution (ADR) techniques like mediation, adjudication, and conciliation often appear as a voluntary option in construction contracts (Cheung 2006; Chau 2007). Essentially, a neutral third party who has relevant experience is invited to give professional advice or decision based upon the evidence and pleadings provided from the disputants (Jones 2006). However, researchers pinpointed that nonbinding decision made by the neutral third party as the major shortfall of applying ADR techniques in resolving construction payment disputes (Kennedy 2006, 2008; Tanielian 2013). In construction contracts, ADR is usually set out as a method that should firstly be adopted before disputants are empowered to proceed to arbitration or litigation. Nevertheless, contract provisions in many building contracts did not restrict main contractors and employers from overriding dissatisfactory decisions made by the neutral third party (Gaitskell 2007). Because mediation, adjudication, and conciliation are not legally binding, there is minimal enforcement to protect and ensure periodic cash flow of the contractors and the subcontractors. With this background, the Housing Grants, Construction and Regeneration Act (HGCRA) was enacted in the United Kingdom in the late 1990s. Kennedy (2006) points out that the HGCRA improved the efficiency and productivity of resolving payment disputes by way of: 1. Providing a statutory right to refer disputes to adjudication, 2. Providing the right for periodic, interim or stage payment, 3. Providing a system to determine means of valuing payments, 4. Providing the establishment of the date for payment periods, 5. Prohibiting unfair terms including pay-when-paid clauses in the contract, 6. Providing limited rights to withhold payments, and 7. Providing the right of suspending performance without penalties. Many countries have followed suit and passed their own legislation to impose a statutory use of adjudication to resolve paymentrelated disputes. Australia adopted a similar piece of legislation to tackle the growing frustration and discontent of resolving payment disputes by using arbitration and litigation (Jones 2006). The Building and Construction Industry Security of Payment Act was enacted in the State of New South Wales in 1999. Other states and territories introduced similar acts during early 2000s. During the same period of time, mandatory adjudication was also introduced into countries like New Zealand and Singapore (Cheung et al. 2010). Research efforts have attempted to investigate the effect of mandatory ADR on resolving payment disputes (Gaitskell 2007; Doncaster 2008). Diverse views were obtained from these studies. Indeed, countries that do not have mandatory ADR have been undergoing different pathways to tackle the problems arising from payment disputes. In the United States, the use of ADR has been confined at the contractual level. If either of the contracting parties refuses, ADR can be bypassed. A recent study also indicated that the practitioners used to rely on sophisticated process like arbitration and litigation to resolve payment disputes (Jaffe and McHugh 2010). In Hong Kong, voluntary mediation has been introduced in the standard forms of construction contracts for public projects since the early 1990s (Cheung 2006). In 2005, the private sector followed the government’s footsteps, and voluntary mediation was for the first time included in the Joint Contract Working Committee’s Standard Form of Building Contract (Cheung et al. 2010). As such, ADR is not mandatory for resolving payment disputes. The fact that different approaches are used to tackle payment disputes makes it interesting to study the underlying reasons. Studies from jurisdictions with statutory ADR suggested diverse views of mandatory use of ADR in construction dispute settlements (Jones 2006; Ndekugri and Russell 2005; Chau 2007). Case studies conducted in Australia indicate that the time limits for responding to claims through adjudication are too restrictive (Jones 2006). Similar findings were reported in a case study conducted in the United Kingdom (Ndekugri and Russell 2005). The findings indicate that some clients defied their subcontractors’ right to adjudicate. Furthermore, the adjudicator’s decisions may not be enforceable (Ndekugri and Russell 2005). Although agreeing that statutory ADR is a practical and equitable solution for resolving construction disputes, Chan (2006) asserted that the legislation inevitably violated the doctrine of freedom of contract in Singapore. As such, is mandatory adjudication a panacea for attaining effective payment dispute resolution? This special issue is aimed at publishing a collection of papers representing current research in payment dispute resolution. It focuses on the practices of payment dispute resolutions; analysis of payment in disputed cases; studying the practicability of the Security of Payment Acts and the like in various jurisdictions; the roles of adjudicators in resolving payment disputes; and the design and application of a decision support model/system in resolving payment disputes. Hopefully the articles published in this special issue can help to gain insights and shape future research direction in resolving payment-related disputes in construction projects.

Developments in the United Kingdom Dispute Resolution Process

AbstractIt is generally recognized that the U.K. construction industry is associated with low profit, delay in payments, cash flow concerns, short-term relationships compared with other industries, and high levels of business failure. In particular, claims and disputes have proliferated in the industry largely due to unfair payment practices. Therefore, to encourage a swifter and more economic method of resolving construction disputes by way of adjudication, the U.K. Housing Grants, Construction and Regeneration Act 1996 (HGCRA) came into force on October 1st, 2011in England and Wales, and November 1st, 2011 in Scotland. This study presents the HGCRA 1996 Act—highlighting its strengths and weaknesses—along with the new 2009 Construction Act. The study additionally presents awareness of the new Act, key reasons for amending the HGCRA 1996 Act, and the impact of key changes in the Act on the dispute resolution process. The paper concludes that the new Act is perceived as being more effective at improving ca...

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

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.

Going Green: Researching in Legal Affairs and Dispute Resolution

Green and sustainable development is a journey toward discovering a new revolution in the built environment. Its destination would create a built environment which would foster wise use of natural resources and ultimately be in harmony with the natural environment. These concepts are generating significant interest throughout the world and causing remarkable changes in the research focus of construction engineering and management. In the last decade, this change has also been visible in the recruitment markets of academia, where universities are now actively recruiting talented academics with research interests in green and sustainable development. Sustainability research covers a large spectrum of topics, such as green purchasing, contract management, conservation policy, construction technology, urban planning, energy, education, health care, environmental management. It has been seen as more than just an environmental issue. Recognizing that these topics are always involved in the change of law and governance, the Journal of Legal Affairs and Dispute Resolution in Engineering and Construction has produced this special issue on green and sustainable construction projects, which has attracted outstanding academics to make their contributions. Although sustainability concerns have already been included in the aims and scope of this journal, this special issue particularly draws the attention to construction lawyers, researchers, and engineers who have opportunities or challenges for researching legal affairs and dispute resolution primarily arising from (1) the enactment of legislation or acts, (2) the changes of standard of care, (3) new ethical requirements, and (4) the changes of contract clauses. We need to better understand the implications of these opportunities or challenges in green and sustainable construction projects. As such, appropriate policy positions and mitigation measures can be developed to ensure sustainability of the industry. Legislation or acts must be enacted in order to control green and sustainable construction. Similar to many other countries, for example, legislation such as the Resource Management Act 1991, the Energy Efficiency and Conservation Act 2000, and the Building Act 2004 covers most of the issues of sustainable management, energy, health and safety in New Zealand. The purpose of the Resource Management Act is “to promote the sustainable management of natural and physical resources,” and avoid or mitigate any adverse effect on the environment arising from the construction activities. For example, proposed developments require environmental impact assessments so as to mitigate possible adverse effects to the environment. The purpose of the Energy Efficiency and Conservation Act 2000 is to “promote, in New Zealand, energy efficiency, energy conservation, and the use of renewable sources of energy.” This act monitors the driving forces of energy efficiency in New Zealand and provides better regulations of the construction industry. The Building Act 2004 requires “buildings are designed, constructed and able to be used in ways that promote sustainable development”. These acts generally reflect the expectations of the Government and the community, and most importantly, regulate the industry to ensure that sustainability is taken into account. “The role of construction professionals goes beyond protecting today’s public, but also to protect our natural environment and future generations.” Other opportunities or challenges for researching legal affairs and dispute resolution are the changing standard of care for construction professionals such as engineers or architects. It is expected that the existing professional practice has been redefined in terms of achieving sustainable designs. It is interesting to see what engineers or architects must do in order to be sustainable and to minimize the legal pitfalls of sustainable design and construction. Engineers should work closely with clients to develop sustainable goals and clarify their standard of care during project development. Similarly, changes in ethical requirements would be considered as another challenge or opportunity. For instance, “sustainable management and care for the environment” has been included in the fundamental ethical value of the Institution of Professional Engineering New Zealand (IPENZ) Code of Ethics. In 2005, this code was revised to incorporate an additional ethical value of professional engineers in. These are as follows:

Best Practice in the Training, Appointment, and Remuneration of Members of Dispute Boards for Large Infrastructure Projects

AbstractThis paper reports part of a qualitative study into evolving practice in the implementation of the dispute adjudication board (DAB) construction dispute resolution technique, a variant of the dispute review board (DRB) concept used in the United States and Canada. Data were collected through a focus group interview of 20 highly experienced dispute resolution practitioners from engineering and the law. The group was assembled from members of FIDIC-NET with direct experience of project DABs. The part reported here concerns practice and procedure for establishing DABs. The main findings are that the constitution of DABs is often delayed because of either project owners’ ignorance of the DAB process or deterrence by the cost of the DABs; such owners also tend to insist on appointing DAB members from local engineers and lawyers without sufficient understanding of the DAB process; rates of remuneration of DAB members vary widely; the training provision for DAB membership and advocacy skills is inadequat...

Determining the Optimal Premium for ADR Implementation Insurance in Construction Dispute Resolution

In most of today’s construction projects, disputes are almost inevitable, and the implementation costs associated with dispute resolution are becoming increasingly expensive. One approach to deal with the risk of dispute-related cost overruns is by pooling the risk using alternative dispute resolution (ADR) implementation insurance. This innovative insurance product is designed to allow the insurance company to compensate any ADR implementation cost that project participants incur during the construction phase. In return, the insurance company will receive a premium for bearing the risk of excessive ADR implementation costs. Similar to commercial medical and auto insurance, the ADR insurance policy specifies a deductible limit (DL) and a maximum payment limit (MPL) on project participants to prevent both moral and morale hazards. In this case, project participants must bear part of the future ADR implementation costs before their insurance is activated. Based on the basic framework of ADR implementation insurance previously developed by the writers, this paper proposes an advanced model with the two additional insurance limits to help determine the optimal point on the project participants’ subjective loss curve. The objective is to provide a mutually advantageous insurance policy and minimize project participants’ total expected subjective loss. An example is provided to illustrate the benefits of the proposed methodology. The results show that project participants’ subjective loss function (SLF), DL, MPL, and the expense loading factor α together play important roles in determining the optimal premium for the ADR implementation insurance.

Analysis of Construction Dispute Review Boards

The construction industry has long been burdened with inherent adversarial relationships among the parties and the resulting disputes. Dispute review boards (DRBs) have emerged as alternatives to settle construction-related disputes outside courts. Although DRBs have found support in some quarters of the construction industry, the quantitative assessment of the impact of DRBs has not been adequately addressed. This paper presents the results of a research project undertaken to assess the impact of DRBs on the construction program of a large-scale highway agency. Three dimensions of DRB impact were assessed: (1) influence on project cost and schedule performance, (2) effectiveness of DRBs in preventing and resolving construction disputes, and (3) costs of DRB implementation. The analyses encompass data from approximately 3,000 projects extending over a 10-year period (2000–2009). Quantitative measures of performance were developed and analyzed for each category. Projects that used DRBs faced reduced costs and schedule growth (6.88 and 12.92%, respectively) when compared to non-DRB projects (11.53 and 28.96%). DRBs were also found to be effective in avoiding and settling disputes; the number of arbitration cases reduced consistently after DRB implementation, and DRBs have a success rate of 97% in settling disputes for which DRBs were used. Moreover, costs of DRBs were found to comprise a relatively small fraction (i.e., approximately 0.3%) of total project budgets. It was concluded that DRBs were effective dispute prevention and resolution alternatives with no significant adverse effects on project performance.

2011 Best Paper Awards

A committee at the Journal of Legal Affairs and Dispute Resolution in Engineering and Construction selected the following two articles as the best papers for 2011: 1. In the Forum/Synopsis category: Tak Wing You and Sai On Cheung, “Behavioral Studies of Project Dispute Negotiation in Engineering and Construction: Visit to Bandura’s SelfEfficacy Theory.” Vol. 3(3), pp. 97–100. 2. In the Scholarly/Feature/Case Studies category: Peter J. Boucher, M. Scott Devlin, and Amarjit Singh, “Regulations and Liabilities of Constructed Wetlands for Aquacultural Wastewater Treatment.” Vol. 3(1), pp. 41–51. Congratulations to the authors for their contribution to the profession and the Journal.

The mediation of construction disputes

Much more has been written about the theory of mediation, and its proper place in the avoidance and resolution of disputes in construction, than about its actual use. This paper combines hard detail about the practice of mediation within UK construction litigation. It summarises the key aspects of mediation in, and its relation to other, formal and informal methods of dealing with construction disputes. The paper also summarises the key findings of ‘Mediating Construction Disputes: An Evaluation of Existing Practice’, a report by Nicholas Gould of Fenwick Elliott, conducted by the Centre of Construction Law and Dispute Resolution at King's College London and the Technology and Construction Court.

Resolving construction disputes in Dubai

As the Middle East’s leading business and service hub, Dubai has been the centre of attraction for various industries for a long time. Finance, logistics, hospitality, real estate and construction industries have been among them. Particularly in real estate and construction, mega projects have been planned, designed and commenced at an amazingly fast pace, competing with the inbound flow of capital and the rising population. Although the global financial crisis has slowed the rate of economic development, many believe that it has also provided the pause that was needed to review, adjust and harden for further growth over the years to come. This paper provides an overview of some of the essential means of construction dispute resolution seen in Dubai. It is anticipated that it will familiarise readers, principally from a foreign contractor’s perspective, with the key features of doing construction business in Dubai.

Mediation: the future of construction dispute resolution

Resolving disputes on construction contracts can be a disproportionately expensive business, even if adjudication is chosen over litigation. Robert Jackson of Parlé says civil engineers should consider mediation as more modern, sustainable and cost-effective alternative.

Foreword from the Editor-in-Chief

International Review of Law seeks to promote positive and rational legal developments across borders and cultures, seeking to develop the law and improve legal scholarship. 2013 was a year that saw much change internationally and the need for constructive dialogue was clear. From our base in Qatar, we are well-placed to help build bridges and debate new ideas. Being a bilingual and open-access general law journal allows us to be a venue where readers can learn from one another. Indeed, the development of law in particular fields today happens simultaneously in different nations and is not isolated. Distinguished authors from around the globe have thus contributed in varying fields of law. We receive articles on an array of topical matters concerning legal developments that are of relevance to certain jurisdictions, and from which all jurisdictions can learn. The journal has been noted for its high quality and far-reaching ambition. Much of this results from its stringent peer reviewing process to ensure that each article reaches its full potential to be included. We rely on the most respected scholars in particular fields in this process. We are grateful for the vast support network that helps us achieve our goals. In continuation of our project, we present the latest volume of the International Review of Law covering the Summer and Winter 2013 issues. The Summer 2013 issue has articles on construction law and dispute resolution, developments in Islamic law, medical law, corporate law and criminal law. Meanwhile the Winter 2013 issue covers topics including admiralty law, corporate law, energy law, international law, medical law and telecommunications law. We are delighted with the quality and diversity of authors who have contributed important pieces from across the world International Review of Law has tens of thousands of readers, with its topical multi-jurisdictional discourse prompting wide-scale global attention. Thousands of hard copies of the journal are shipped to the far corners of the world. It is freely available online. It has been indexed in major systems, cited and referenced to an impressive level. We make every effort to maximise its potential and ensure its recognition. To achieve all we have done and ensure authors can continue to publish without cost, we are thankful for the continual support we have received from our university management, and particularly Qatar University’s President, Professor Sheikha Abdulla Al-Misnad as well as the leadership of the College of Law. We are also grateful for the daily support we receive from our publishers Bloomsbury Qatar Foundation/QScience.com. We are always grateful for the leadership of his Highness the Emir, Sheikh Tamim bin Hamad bin Khalifa Al Thani, whose vision has enabled Qatar University and our journal to achieve success.