Efficacy of Mediating Construction Disputes during Economic Recession: Case Study of Mediator Style

Abstract

The potential of achieving the desired outcomes via mediation is less researched, particularly in public sector projects where construction as a market is somewhat volatile in many parts of the world. Moreover, multicriteria decision-making methods are a rare application in this type of study. Hence, this study is to address this knowledge gap by proposing the most appropriate mediation style to settle construction disputes when construction as a market takes the form of sluggishness where the parties tend to compromise their positions for mutual survival, with particular reference to the Sri Lankan context. A list of factors inspiring mediation was identified through a systematic literature review and focus group discussion followed by the use of an analytic hierarchy process (AHP) tool for the selection process. At the final step, the priority of each mediation style was determined against four key criteria, namely mutuality, empowerment, autonomy, and creativity. It is found that the parties prefer to see that the mediator takes an evaluative style while acknowledging quasi-imposition as a necessary supplement in mediating construction disputes. A period experiencing an economic crisis will eventually result in a boom of issues, claims, and disputes. The topicality of settlement methods has been accentuated by the fact the construction employers, contractors, suppliers, and industry practitioners desperately seek some kind of speedy resolution on one important condition: unprejudiced business relationship. This is true for many countries facing economic crisis including Sri Lanka, which has almost come to a deadlock in new job creation. In 2022, the construction sector contributed only 12 billion SLRs to the Sri Lankan economy, crashing 90% of workload and losing more than 2 million jobs, resulting in a severe economic dead end. Except for a few instances, both the employers and contractors tend to collaborate for a consensus when a dispute arises, particularly in a financial crisis. As such, it is timely for construction practitioners to make a rational choice as to how mediators should act when both parties work together for a mutually acceptable settlement.