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Engineering and Construction       Law and ContractsChapter 18 Contract Dispute Resolution                            Tech...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES        The traditional dispute resolution process with   ...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES         Contract Claims                Occur at any sta...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES       Information and Communication        Technology (I...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES        Building Information Modeling               Prov...
CHAPTER EIGHTEEN - CONTRACT DISPUTE          RESOLUTION TECHNIQUES   Contract Negotiations         Requires both parties...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES     Negotiators - Traits Required            Preparatio...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES          Negotiators - Traits Required:                ...
CHAPTER EIGHTEEN - CONTRACT DISPUTE          RESOLUTION TECHNIQUES    Contract Mediation           Inserts a neutral thi...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES        Arbitration               Either binding or nonb...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES       Arbitration             Neutral third party or se...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES        Advantages of Arbitration:               Less ti...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES     Advantages of Arbitration:            At the conclu...
CHAPTER EIGHTEEN - CONTRACT DISPUTE          RESOLUTION TECHNIQUES   Litigation         One party sues another in the co...
CHAPTER EIGHTEEN - CONTRACT DISPUTE          RESOLUTION TECHNIQUES   Litigation         Reasons not to use litigation:  ...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES       Dispute Review Boards             Board members a...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES     Alternative Dispute Resolution Techniques:         ...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES     Alternative Dispute Resolution Techniques:         ...
CHAPTER EIGHTEEN - CONTRACT DISPUTE        RESOLUTION TECHNIQUES     Alternative Dispute Resolution Techniques:         ...
Thank YouDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management   20
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Dispute resolution technique

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Dispute resolution technique

  1. 1. Engineering and Construction Law and ContractsChapter 18 Contract Dispute Resolution Techniques Associate Professor Dr. Rafiq Muhammad Choudhry BSc(Civil-Honor), MSc(CEM), PhD(MSE), Post-Doctorate (CEM), MIE(Pak), PE Email: rafiq.choudhry-scee@nust.edu.pk / choudhry03@gmail.com Head, Department of Construction Engineering and Management-NIT School of Civil and Environmental Engineering (SCEE) National University of Sciences and Technology (NUST) Sector H-12, Islamabad
  2. 2. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES The traditional dispute resolution process with alternative dispute resolution techniques added to it is shown belowDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 2
  3. 3. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Contract Claims  Occur at any stage in the execution of construction contracts  Typical causes of claims  Differing site conditions  Delays  Design errors or changes  Interpretation differences  Acceleration or suspension of work  Construction failures  Additional work  Deleted work  If differences are not settled one of the parties files a change order or a claimDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 3
  4. 4. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Information and Communication Technology (ICT) and the Electronic Marketplace  Complicates dispute resolution process due to the technologies not having been addressed yet by the legal system and contractual practices  Three legal ICT issues: 1) admissibility of emails in court proceedings 2) electronic signatures in global and national commerce act 3) the Elegal European commission researchDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 4
  5. 5. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Building Information Modeling  Provides capability of creating three dimensional models and four dimensional schedules  Allows for quantity take offs to be completed by the program  Allows for integrated project delivery using collaborative agreements such as concensusdocsDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 5
  6. 6. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES Contract Negotiations  Requires both parties to compromise to settle a claim  In construction 90% to 95% of construction claims are settled through negotiations (right up to court dates)  Negotiators try to persuade opposing parties to relinquish one or several claims if awarded another large claim  Requires bargaining with opposing party  Saves time and money if claims are settled using negotiationsDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 6
  7. 7. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Negotiators - Traits Required  Preparation and planning skill  Knowledge of subject matter  Ability to understand the true interests of the firm  Ability to think clearly and rapidly under pressure  Ability to express thoughts verbally  Good listening skillsDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 7
  8. 8. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Negotiators - Traits Required:  Patience  Ability to persuade others  Ability to understand others  Ability to control emotions  Ability to maintain flexibilityDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 8
  9. 9. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES Contract Mediation  Inserts a neutral third party into the negotiating process to help reach a settlement  Used to help control losses and damages  Preserve relationships, clarify issues, and secure agreements  Used to augment negotiationsDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 9
  10. 10. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Arbitration  Either binding or nonbinding  If nonbinding either party could sue if not satisfied with the results of arbitration  Federal arbitration act applies in contracts for interstate commerce  American arbitration association provides guidelines (see Appendix J)Dr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 10
  11. 11. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Arbitration  Neutral third party or several people are hired to evaluate evidence, listen to arguments of both parties, and provide a decision and settlement award  Arbitrators are from the American arbitration association or state or local arbitration associations  Arbitrator may not have any type of affiliation with the owner or the contractor  Parties to arbitration provide arbitrator with construction contract, drawings, and other documentsDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 11
  12. 12. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Advantages of Arbitration:  Less time than litigation  Less expensive than litigation  Lawyers not required  Private proceedings - helps preserve reputations  Location, time, and arbitrators all selected by disputing parties not the court system  Rules of evidence do not apply  Do not follow precedent lawDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 12
  13. 13. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Advantages of Arbitration:  At the conclusion of the arbitration proceedings the decision has to be made in thirty days (4 months)  No punitive damages  If award is not paid the party files a petition with the courts  If no response to the petition within ten days it becomes a judgment  Sureties are not bound by arbitration awards  Have to file a separate lawsuit against the suretyDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 13
  14. 14. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES Litigation  One party sues another in the court system  Reasons not to use litigation  The results of lawsuits become part of the public record, which could be viewed by anyone, and this could be damaging to the reputation of a firm or produce unwanted publicity in newspapers, on television, or on the internet.  The cost of litigation could be prohibitive since there are filing fees, court costs, and legal fees.  Lawsuits could take years before they reach the court docket.  Lawsuits are tried in courtrooms where it is difficult to demonstrate engineering or construction concepts without being able to see the actual items being described in court cases.Dr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 14
  15. 15. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES Litigation  Reasons not to use litigation:  Court proceedings require that cases follow rules of evidence where items may only be introduced as evidence if they are first introduced during the testimony of witnesses.  Cases are argued based on precedent law and this requires the investigation of previous legal cases in order to locate similar cases that could be used to argue the merits of the current case and this requires that cases focus on legal not technical issues.  The decisions rendered by the court could be appealed if one of the parties is able to prove that the trial was not conducted properly.  Disputants risk settlements that might include damages in addition to actual losses.Dr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 15
  16. 16. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Dispute Review Boards  Board members are hired at the beginning of projects  Could be resident at construction job sites  Hold weekly meetings to settle claims  Construction dispute review manual explains DRB process  Used on government public works projectsDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 16
  17. 17. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Alternative Dispute Resolution Techniques:  Mediation/arbitration - mediator switches role to be arbitrator if no agreement is reached during mediation  Early neutral evaluation - mediator provides an evaluation on the merits of the case to each party  Minitrials - actual proceedings presented to company executives with authority to authorize settlementsDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 17
  18. 18. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Alternative Dispute Resolution Techniques:  Rent a judge - hire a lawyer or former judge to arbitrate a case  Court annexed arbitration – Dispute resolution procedure that is available within the court system. both sides present case to lawyers, the decision is not binding, and the case could still be heard in court. If both parties have not waived the appeal process.Dr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 18
  19. 19. CHAPTER EIGHTEEN - CONTRACT DISPUTE RESOLUTION TECHNIQUES  Alternative Dispute Resolution Techniques:  Summary jury trial –are used while disputants are waiting for their case to be tried in the court system; they are considered to be Mock trails.  Trial presented to a jury before the real trial and the results are presented to the judge who presides over negotiations in his or her chambers  Both parties know how the case might be settled by a jury and this knowledge is used by the judge to influence the disputants to settle the case during negotiations.Dr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 19
  20. 20. Thank YouDr. Rafiq Muhammad ChoudhryAssociate Professor and Head, Department of Construction Engineering and Management 20

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