Cost Effective Resolution of Construction Disputes

Abstract

Litigation and arbitration of construction disputes have become increasingly expensive, time consuming and unappealing. Adjudication, expert determination and dispute boards (evaluative ADR) are increasingly being used to resolve disputes in a more timely and cost-effective manner than litigation or arbitration, In contrast to the compromise outcome typically negotiated by the parties in a mediation or conciliation, these evaluative methods of ADR result in a reasoned determination in accordance with the contract and the law, prepared by a third party independent neutral. Each of the alternatives has its advantages and disadvantages, canvassed in this paper. Statutory adjudication for certain types of disputes is mandated in a number of jurisdictions around the world, and although the resulting determination is only provisionally binding, in the great majority of cases it becomes de facto finally binding. Disputing parties can implement expert determination in either a binding or non-binding form, tailored to suit the circumstances of a particular dispute. Dispute boards come in two versions – an ad hoc dispute board set up to adjudicate a specific dispute, and a standing dispute board implemented at the start of a project that is not only able to adjudicate disputes if they arise, but is in a unique position to assist the parties to avoid disputes. The paper discusses the formal requirements for each of these evaluative methods of ADR, and makes some suggestions as to the types of disputes they are most suited to.