Avoidance vs. Resolution
“Dispute avoidance” and “dispute resolution” are words that people sometimes use as if they have a single, understood meaning. However, the truth is that these terms encompass a wide variety of activities to prevent or resolve conflicts.
There are different approaches to dispute avoidance and different approaches to dispute resolution. Subcontractors who are aware of their options can choose the dispute avoidance and resolution methods that are most appropriate according to the clients or projects they are bidding. The worst approach is for a subcontractor not to think ahead about reducing disputes and to not consider what method will work quickly and inexpensively to dispose of disputes once they arise.
Downside to Resolving in Court
Taking the wait-and-see approach means that preventable disputes will occur and the forums in which the disputes will be resolved will be left up to chance. A subcontractor may not always want, for example, to have disputes resolved through the legal system, involving attorneys and others who will decide the fate of their claims but who don’t understand construction.
The “Guideline on Avoidance and Resolution of Construction Disputes,” developed and published by ASA, the Associated General Contractors of America (AGC), and the Associated Specialty Contractors (ASC), notes: “Resorting to lawsuits can be costly and time consuming, and judges and juries generally lack an understanding of the construction process. The net result is all too often that only lawyers, consultants and expert witnesses benefit from lengthy court actions.”
Dispute Resolution Options
This guideline, one of the Guidelines for a Successful Construction Project, is a good resource for learning about subcontractors’ numerous options. It discusses several strategies for preventing disputes:
- Equitable risk allocation in contracts.
- Post-award partnering meetings to identify issues.
- Group bonuses for achieving project goals.
- Knowledgeable construction team members who can settle issues without third-party intervention.
It also discusses numerous dispute resolution choices that subcontractors and their clients may employ, including:
- Direct discussions among appropriate project team members.
- Litigation.
- Third-party mediation.
- Third-party arbitration.
- Dispute resolution and counseling panels.
- Initial decisions by the architect.
- Advisory rulings by neutral experts.
Subcontractors who read the guideline will have greater awareness of the potential advantages and disadvantages of each option. This, in turn, should make it easier to select options that fit the needs of a client/project, and even make it easier to price work according to the level of risk that exists for extended, lengthy disputes.
