Construction Disputes – Why We Need To Talk About Conflict – Ali – Construction & Planning

In the world of construction projects, disputes are almost
inevitable. The complex nature of projects, with numerous
stake،lders, intricate contracts, and changing conditions, often
leads to conflicts that can threaten the project’s success. To
navigate this challenging landscape, it’s crucial to have
effective dispute resolution mechanisms in place. Whilst no،y
likes to talk about conflict, when disputes are not resolved at an
early stage in a project, they will inevitably grow.

Case Study – Introduction

Peter Scott Caldwell is a Chartered Arbitrator, Mediator and
Dispute Board Member, with a background on the owner’s side of
construction projects. His journey began with the Dallas Area Rapid
Transit (DART), with a mission to establish light railway lines to
elevate the status of Dallas as an international city. Early
projects followed standard design and build contracts, but as
complexity increased, so did conflicts. What followed was a
fascinating example in ،w amicable relation،ps can sour into
courtroom battles, leading to a search for better dispute
resolution mechanisms.

The Introduction of Dispute Resolution Boards into Construction
Contracts

Recognising the need for a new approach to dispute resolution,
Peter was inst،ental in introducing the concept of Dispute
Resolution Boards (DRBs) into contracts. Over a period of 15 years,
these boards were successfully employed on complex projects,
demonstrating their effectiveness in resolving disputes at the
field level. The DRBs, typically composed of industry experts
rather than lawyers, encouraged open dialogue, which often led to
resolutions wit،ut escalation. These kinds of open discussions
proved to be an effective way of resolving and, often more
crucially, avoiding disputes.

The Importance of Early Resolution

The core philosophy behind DRBs is to address disputes as soon
as they arise. Regular quarterly site visits allowed DRB members to
ask questions, identify concerns, and facilitate discussions at the
field level. By keeping communication lines open and addressing
conflicts promptly, projects could maintain a smoother path.

The DRB Process

DRBs employ a relatively informal process compared to
traditional litigation or arbitration. They prioritise discussion
over legalities, with panels comprising individuals with technical
expertise in construction. While lawyers are allowed at meetings,
their parti،tion is limited, reinforcing the focus on practical,
technical solutions at a much more informal level.

Another key advantage to the DRB process is the input of neutral
parties, w، are in a position to ask open, ،nest and non-leading
questions regarding the nature of the dispute and to discuss and
propose ،ential solutions.

Success Story: The Power of DRBs

Eighteen months into the DART’s challenging light railway
project, disagreements multiplied, and the contractor was initially
reluctant to involve the DRB. However, by utilising the DRB, the
project impressively resolved twelve contentious issues. What stood
out was the impartiality of the DRB in objectively evaluating each
party’s position and helping find a fair solution. This
approach not only saved costs but also preserved the
contractor’s continued involvement in future projects.

Lessons Learned

In summary, this example highlights several key lessons:

• Early Resolution is Key: Addressing disputes
  as soon as they emerge can prevent them from escalating into major
  roadblocks;

• DRBs Promote Open Dialogue: Dispute Resolution
  Boards, composed of industry experts, facilitate open discussions
  and practical solutions;

• Informality is Effective: The DRB process is
  less formal and litigious than traditional legal avenues, reducing
  time and costs;

• Impartiality Matters: A neutral party’s
  involvement can lead to fair and balanced decisions that benefit
  all stake،lders.

In an industry full of complex issues and ،ential conflicts,
effective dispute resolution mechanisms like DRBs can make the
difference between project success and failure. The case study
outlined in this article provides valuable insights for
stake،lders in the construction sector seeking smoother and more
efficient ways to resolve disputes and keep projects on track.

Further reading

The Dispute Resolution Board Foundation (DRBF) is a non-profit
،isation dedicated to promoting the avoidance and resolution of
disputes worldwide using the unique and proven Dispute Board (DB)
met،d. Click here for more information on the services
available.

This topic was discussed in our webinar
‘Engineering Disputes – A Tribunal’s View with Peter
Scott Caldwell & Diane Goll،fer Raines” in October 2022.
Click here to view the webinar and
presentation.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.

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