Simulated Effectiveness of Claims and Disputes Resolution Progression Using Agent-Based Modeling

Abstract

Previous research has shown that several operational mechanisms are offered Aby standard forms of construction contract conditions to address the administration and resolution progression of claims and disputes. However, it is still unknown to practitioners as to which set of operational steps can be viewed as most effective in allowing an optimum such progression. The work presented in this paper examines this exact progression optimality property by conducting agent-based modeling (ABM) simulations, to compare the real-life effectiveness of the six standard forms of contract conditions that are in use. The adopted methodology involved: (1) developing the conceptual models, (2) formulating the simulation rules, (3) building the ABM simulation models, and (4) verifying and validating each of them, to respectively check both whether the model in question was built right and whether the right model was built. The findings are presented through an in-depth analysis of the outputs, namely (1) average time to have a binding judgment, (2) percentages of claims/disputes resolved upon reaching agreement, (3) average time to reach agreement, (4) percentages of claims/disputes ending up in an unregulated period, and (5) percentages of claims/disputes referred to arbitration. The work contribution is in the form of a proposed optimum mechanism, involving a preferably long consultation stage to precede the initial judgment one, and the subsequent inclusion of a time-regulated adjudication step followed by a mediation stage regulating the referral of unresolved disputes to arbitration.