Paradox of Bias and Impartiality in Facilitating Construction Dispute Resolution

Abstract

Construction contracts are inevitably incomplete due to the impossibility of foreseeing all future contingencies that may necessitate reallocation of duties and thus renegotiation of contract terms. Moreover, adjustments of contract terms may invite opportunistic moves by contracting parties that may create disputes. If disputes are not resolved promptly, protracted resolution is resource-heavy. In this regard, third-party neutrals have been involved to facilitate more efficient resolution. Third-party neutrals are jointly selected by contracting parties as facilitators in construction project dispute resolution (CPDR). Thus, they are expected to be impartial in conducting their services. However, third-party neutrals are humans who are inevitably subject to unintended judgment flaws. This study aims to explore the possibility of third-party neutrals being affected by judgmental biases. Practicing construction professionals were invited to take the role of third-party neutral in a CPDR simulation wherein opportunistic behaviors were embedded. Respondents were asked to report their assessments about the contactors’ level of opportunism in two parts (Parts A and B) of the simulation. The simulation has been designed with events indicating a stronger level of opportunism in Part A and a more pragmatic level in Part B. The design therefore hypothesizes that the respondents would return different ratings for Parts A and B. However, in this study, similar ratings were received in general, thus suggesting their assessments might have been affected by bias. In this connection, two forms of bias are possible: anchoring and confirmation. The findings raise caveats for CPDR third-party neutrals, especially standing neutrals like dispute resolution advisors who follow through a project from commencement to completion. The standing nature of their services may expose them to judgmental biases.