Disputes are common in the construction industry. A project has many moving parts, and there are varying parties involved, including the employer, main contractor, consultants, subcontractors, suppliers and workers.
Even with the best-laid plans, issues come up. When they do, there are different ways the parties can resolve them.
Common construction disputes
No matter what type of construction project it is, there are certain problems that commonly crop up. Causes of common disputes include:
- Start delays and missed deadlines
- Errors in contract documents
- Failure to issue notices
- Poor construction quality
- Noncompliance with contract obligations
Dispute resolution methods
When it comes to resolving construction disputes, the Harvard Law School Program on Negotiation explains that there are three main methods. The most familiar kind is litigation. This consists of lawyers of the disputing parties arguing and presenting evidence in front of a judge or a jury and a judge. Either the judge or jury makes the final ruling.
Going to court can be time-consuming and expensive, so more people are choosing alternative dispute resolution methods. The Cornell Law School Legal Information Institute discusses arbitration and mediation.
Arbitration is commonly used for construction disputes. It is similar to a trial format but more informal. The arbitrator is a neutral third party that acts as the judge. Each party presents their case and related evidence, and the arbitrator makes a binding decision based on the information.
Mediation is a more informal process that involves a neutral third party. This mediator helps all relevant parties discuss the issue and come up with creative solutions. The parties themselves come up with an agreement with the help of the mediator.