Seek Early Resolution of Construction Disputes

Early resolution of construction disputes can save a lot of time and money…for all parties.

Some amount of disagreement is an inherent and healthy part of the construction process, and ensuing conversations about construction quality and building performance can lead to better understanding and be beneficial to both quality and performance.

A well managed construction project will encourage conversations about substantive issues that affect quality and building performance but will also manage these conversations such that conflicts do not grow into unresolved disputes that can derail progress and threaten successful outcomes.

Disagreements that can be resolved by those closest to the issue are likely to cost less and take far less time to resolve than disputes that are pushed up through the ranks to be resolved by parties who are not familiar with the issue and perhaps not even familiar with the context of the issue or the terms that are used in the workplace to describe it.

For those who experience a disagreement on a construction project, it may seem easiest to take it back to the home office and leave the resolution to a manager who is higher up in the chain of command. But the story that is carried to the home office may be filtered by the reporter, and the manager who is left to resolve the issue may be less familiar with the details than the individual who reports it. If the “push up” process continues for a few steps up the organizational ladder, then the upper management of one organization will be negotiating with the upper management of another organization over matters that neither understand very well. Less able to resolve the matter than those closest to the issue, they may decide that a formal legal process is their only recourse. And that decision may start a process that will cost many times the actual value of the disputed matter, had it been resolved by those closest to it. The formal process actually takes the resolution out of the hands of the parties and puts it into the hands of someone (perhaps a judge or jury) who knows much less about the issue than the management team that has last attempted to resolve it.

The right answer to this dilemma is, of course, to resolve disputes as soon as possible and as close as possible to (or by) those who first encountered the issue. Managers who send employees “into the fray” may be hesitant to delegate authority to negotiate matters of cost. However, they can delegate authority to negotiate tentative agreements, and delegating that responsibility with some coaching can lead to early and less costly dispute resolution and also develop negotiating skill in the organization’s workforce (the next generation of management).

The first – and probably most important – skill that is needed in resolving a construction dispute is to listen well (and respectfully) to what the other party is saying and to try to see the issue from the other party’s point of view. It is important to see the issue (not the other party) as the adversary that must be overcome.

If emotions are too high for those closest to the issue to reach a resolution, it may be beneficial to the parties to have an independent “third” party – a professional listener who understands the business, the terminology, and the context – who can help to facilitate a conversation that can lead to a dispute resolution that comes from the parties and a resolution which the parties feel they own.

Posted in Construction Administration, Project Administration, Project Management

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