Dealing With Construction Disputes Pro-actively (Part 2)

By Cotney Consulting Group. 

It is vital that disputes be avoided, minimized or settled as soon as possible for the sake of your construction project.   

In my previous article we discussed various identified root causes during the pre-construction phase that can lead to disputes. During this article I will consider identified root causes of construction disputes during the construction phase and possible mitigation measures to help eliminate or at least minimize disputes. 

Here are 5 identified root causes during the construction phase: 

1 – Slow client responses 

In many instances the contractors submit various warnings or concerns to the client/owner of things that they consider to be a potential threat to the success of their project. Research considered for this article concluded by means of surveys conducted with the participation of many contractors, found that many contractors are of the opinion that slow response from clients contribute significantly to disputes. If the client could respond to the contractors concerns timeously, many of the concerns can be addressed before the contractor suffers loss of time or progress.

A speedy response from a client to actively participate in the mitigation of possible risks not only avoids the risk turning into a claim, but it also instills confidence with the contractor that the client considers the contractors risks as urgent and important. This subsequently also improves communication between the parties and reduces unnecessary conflict and frustration. 

2 – Quality of contractor’s work 

The quality of a contractors work amongst client’s and owners ranks high on the list of root causes that leads to disputes. When an owner appoints a contractor, the owner needs to ensure that the contractor has adequate quality plans and procedures in place to ensure compliance to the relevant quality standards of the project. The owner/client must also consider previous projects and request visits to other work sites to witness the contractor’s quality plans and procedures in action. The owner/client can even arrange a meeting with previous clients of the contractor to discuss the quality of work done by the contractor.

Once the owner is confident that the contractor has the structure and processes in place to adhere to the quality standards of the project, the owner must ensure that the contractor only appoints resources that has the knowledge and ability to implement, monitor and maintain these procedures. The client should also ensure that the resources that the client appoints have the necessary knowledge, experience and ability to monitor the contractors’ compliance. Another aspect that is also very important is consistency in relation to the implementation and monitoring of the quality system on the part of the client. Inconsistency will lead to doubt and uncertainty and can blur the lines between acceptable performance and below average performance. 

3 – Scope variations/late or incomplete information 

The parties to the contract should attempt to identify incomplete information before contract signing and negotiate beforehand how this aspect will be dealt with when the project has started. Where this was not done or all parties involved neglected to identify these issues, the parties must approach the issue objectively. If the information comes to the knowledge of a party, they should immediately inform the other party and collectively investigate the impact that the incomplete information or the changes might affect the project and the parties.

The detailed evaluations and possible mitigation measures should be decided upon and implemented as soon as practicably possible. If delays or increased costs cannot be avoided, the client needs to objectively assess the claims that the contractor brings to the table. The client must acknowledge the fact that the variation entitles the contractor to additional costs or time or both and be willing to compensate the contractor therefor. The contractor should also not endeavor to unreasonably price for the variations and remain within the ambits of their contract. 

4 – Contractual clause interpretation 

The fact that everyone is different in relation to their background, experience, knowledge and so forth will contribute to the way they interpret things in life. This is no different with the interpretation of contracts. It is also human nature that the contract clause in question will be interpreted in a manner that will favor the party the most. Possible mitigation measures which could avoid or minimize disputes in relation to interpretation issues might be interpretation clauses, involving additional parties to obtain their perspectives and perhaps including notes from clarification meetings as part of your contract document. 

5 – Access to site 

Like I mentioned in Part 1, it is advisable that parties identify possible overlapping of access and high congestion areas before contract signing to enable the parties to have a Plan B and even C that will accommodate all the role players. If the overlapping or shared access cannot be avoided, it is advisable that the processes and procedures which will be applicable in these circumstances was elaborated on before contract signing. If the contractor knew he might share access with another contractor for a certain period and the process clearly outlined how the process would work, the contractor should have planned for these delays and cannot thereafter revert to the submission of a claim due to lack of access. 

It is of the utmost importance for any construction project that disputes be avoided, minimized or settled as soon as possible, especially in the construction phase. Arbitrations or drawn-out litigations increases the costs and in many instances delays the completion of a project extremely. 

Learn more about Cotney Consulting Group in their RoofersCoffeeShop® Directory or visit www.cotneyconsulting.com.  

Original article source: Cotney Consulting Group