Role of Case Laws in Claim Management and Contracts

Abstract

There is a long history of court judgments in the construction sector, providing a wealth of knowledge that can guide contract parties in preempting claims and disputes in construction projects. However, knowledge from case law findings does not seem to percolate to day-to-day contract management activities. This anecdotal statement needs empirical verification. Thus, the current study attempted to understand the extent of case-law-based legal knowledge percolation in day-to-day contract management and its impact on the dispute resolution climate. The study highlighted the gap between the need for and availability of case-law-based training/knowledge using data from India. There were four major observations from the research. First, questionnaire survey results highlighted the fact that engineers and managers in construction projects acknowledge the inevitability of legal awareness for day-to-day contract management. While about 72% of the respondents (76 out of 106) agreed that case-law-based training could have helped in managing disputes better, only 10% (11 out of 106 respondents) reported that their organizations offer regular case-law-based knowledge and training. Moreover, 65% of the respondents (69 out of 106) either confirmed that their organizations do not maintain a case-law learning repository or they are unaware of its availability. Therefore, the second observation is that there is a shortfall in avenues that help professionals gain case-law-based knowledge from training. Although pure experience-based learning can lead to a risky trial and error approach, opportunities for self-learning are also muted. Third, by highlighting a growing trend of expenses incurred for the arbitration and litigation of construction disputes—in other words, legalization—the study highlighted the importance of the development and administration of case-law-based professional training programs. Last, the study also illustrated the potential for case laws to guide engineers and managers in their day-to-day contract management activities. The findings from the study can help the construction industry collaborate closely with researchers and academicians to move a step closer to making legal knowledge easily accessible to contract managers and help them make decisions that can withstand legal scrutiny.