Expert Views - Dispute Management

"There is no doubting that construction and development projects have a high incidence of disputes. Indeed many would argue that engagement models invite claims that may crystallise into disputes as the terms of conditions provide for variations, design changes, extensions to completion dates, loss and/or expense and other claims for additional monies."

Start managing the dispute early

The management of disputes starts before any dispute has arisen in that appropriate managed processes need to be in place at the outset of a contract to ensure that relevant evidence is recorded to assist in maximising entitlements, rebutting or resolving disputes.

Starting to record evidence once a dispute has arisen may be too late and have a detrimental impact on profit performance.

What will the Evidence Include

The first and most critical evidential material is the obligations of the Parties and the governing terms and conditions of the engagement model. This will ensure that both Parties fully understand its own and the Other Party’s obligations. It may be surprising that many disputes involve consideration of the engagement model or more specific terms and conditions as the Parties dispute obligations or the existence of specific terms and conditions.

Once the engagement model is formalised the post contract evidence will include such matters as; labour records, material records, subcontract and supply chain correspondence and associated records, programme activities start and completion dates, notices, trail of general correspondence, photographs, video, and meeting minutes etc.

Dispute Management and Appropriate Strategies

It is critical when any dispute starts to evolve, or has crystallised, that an appropriate strategy is put in place to maximise entitlements, rebut or resolve disputes.

A relevant strategy should be established when a dispute evolves or crystallises which may include consideration of; (i) the nature and circumstances that surround a specific dispute, (ii) the engagement model and terms and conditions, (iii) the objectives of the particular business, (iv) the structure and management team of the Other Party, (v) the financial stability of the Other Party, (vi) the available evidence and records, (vii) the overall likely outcome, (viii) costs, (ix) other business commitments and impact of staff and management time.

More specifically the strategy may include taking a reactive approach by waiting for claims from the Other Party or by waiting to see what the Other Party does. Alternatively, a proactive approach may be adopted by taking the dispute resolution process to the Other Party which may include submitting claims and driving forward with expert determinations, adjudication, mediation, negotiations, litigation or arbitration etc.

Flexibility and Change the Strategy

Once a relevant strategy has been established it is also equally critical that the strategy is reviewed and if necessary changed to suit the on-going development of the dispute, consideration of new evidence or reconsideration of the likely outcome. As such flexibility and the willingness to change the strategy for specific reasons is of utmost importance.

Managing the Interfaces

One of the most important parts of dispute management is managing the interface between various consultants, internal staff and management, experts and legal advisors such as lawyers and barristers. The failure to properly manage the interface will cause confusion, fail to control and increase costs and impact on the overall outcome.