Fundamentals of Alternative Dispute Resolution Processes in Construction

Abstract

With the surge of increasingly complex and fast-track construction projects, disputes are inevitable. Skills in dispute resolution should be part of the tool kit of any practitioner in a managerial position. The perceived shortcomings of litigation and arbitration, with their concomitant rise in costs, delays, and adversarial relationships, have encouraged the rapid growth of alternative dispute-resolution processes, namely, conciliation, mediation, adjudication, and other hybrid processes that have been widely used and well received by the Hong Kong construction industry. For example, mediation is now an integral part of most conditions of contracts published by the government of the Hong Kong Special Administration Region. However, the last decade evidenced the incorporation of increasingly complex dispute-resolution clauses in construction contracts, typically involving several alternative dispute resolution (ADR) techniques and arbitration arranged in sequential tiers. These dispute-resolution procedures render the supposedly more economic and speedy ADR process ineffective. In this study, a hierarchical model is developed to organize attributes of ADR processes. This presentation fits with the use of analytical hierarchy process methodology by a panel of experts to prioritize ADR process attributes. The top-ranked attributes identified as critical include, among others, preservation of relationships, enforceability, neutrality, and consensus. The experts also suggested means to establish these attributes. By focusing on these critical attributes, the dispute-resolution process can be kept simple and effective.