Disputes Resolution: Can Bim Help Overcome

Barriers?
Serdar KOC
School of Built Environment, Heriot Watt University, Dubai Campus, United Kingdom.
email: [email protected]

Samer SKAIK
School of Built Environment, Heriot Watt University, Dubai Campus; United Kingdom.
email: [email protected]

Abstract

Many researchers consider disputes as part of the project lifecycle. Although preventative
actions exist, it is not utterly possible to avoid them. Once the disputes arise, an appropriate
resolution technique should be adopted. Common perception is referring to a resolution method
either internally or via a third party; which may also be binding by law. The resolution process
requires attention to the disputed claims. Hence, deep investigation of the claims and choosing
the appropriate method is crucial for the successful project delivery and reputation of the
industry.
Preparation of disputed claims and resolution process also faces many debates. Conducting To
effective dispute resolution requires attention to proper preparation and presentation of the
incurred events. All the required information should be acquired to estimate and present the
claim, for a smooth settlement. As an integrated digital model of the project, BIM, stores all the
information of the projects in detail. Retrieval of the required information for the disputed
issues can easily be obtained from the model. It is also possible to embed the construction
schedule, change orders and variations, specifications and financial data such as cash flow
along with the multidisciplinary drawings. As this model stores all the information at every
particular time and phase, disputes can be concluded quick and accurate.

In this research, using a case study and literature review, disputes and resolution processes are
deeply studied. A BIM model is created to investigate benefits on overcoming the challenges;
during claiming, and resolution of the disputes. It is seen that the claims are prepared faster and
more accurate in a visualized environment provided by BIM. Furthermore, substantiating and
presenting the disputes for the resolution purpose was incomparable to the traditional methods.
The conclusions recommend that; even the project did not adopt a BIM model earlier; it can be
created for a smooth process, during claiming and resolution of disputes.

Keywords: Claims, Disputes, Dispute Resolution, BIM, Construction Industry

 1. Introduction

The disruptive effects of claims and disputes on the project lifecycle is an invariably fact.
Moreover, the methods used to resolve the issues, whether during the execution, or after the
completion, are long and exhausting. The methods are judged as they are old and not capable to
fulfil current industry needs. Although it is still not part of the traditional construction
methodology, BIM can provide positive impact on the methods’ success. The paper aims to
highlight frequent occurrence of the disputes and the possible undesired consequences
encountered on project lifecycle. Finally contribution of BIM for easy claiming and dispute
resolution purpose is presented in order to understand how BIM can change the traditions in the
construction industry by creating easy solutions.

2. Research Methodology

A Literature review will be conducted to obtain enhanced information on disputes, and

resolution techniques. Dispute triggering reasons will be deeply investigated in order to avoid
project disruption. Furthermore, the new trend in the construction market, BIM, will be studied
through available publications to understand possible contribution on disputes and resolution
processes. All the findings will be filtered through the aim. To provide a sound diagnosis, a
case study is also presented which was recently performed within the construction industry.
With in-depth analysis of the incurred events, the studied case study will point out the common
issues that are transform into disputes and resolved via a popular resolution method; arbitration.
The results of integrating BIM in the process will be observed and evaluated. Outlined results
will be critically analysed, and discussions will be held to improve the dispute lifecycle using
BIM models.

3. Literature Review

3.1 Drivers of Disputes in Construction Industry

In the event of a time or cost overrun or quality dissatisfaction, a claim arises to mitigate the
undesired effects. The disturbance caused by disputes to projects is invariably significant. The
stakeholders require their projects running smoothly with no risk of investment failure (AAA,
2007). Jahren and Dammeier (1990) conducted a research to identify the major dispute reasons.
The risky nature of the construction industry, low bidding system and economic reasons were
stated as important drivers. They also mentioned that the sources of these reasons are; different
site conditions, payment delays, time delays, errors in tendering and ineffective communication.

The deficiency of contract documents, risks and uncertainties and human factors are also major
dispute causes within the construction industry. In capability of contract documentation
generates many conflicts and claims that led disputes. Contracts are often ambiguous to parties;
scope is not properly defined, specifications are unclear or cost rate evaluations are not
provided i.e. in evaluation of prime costs (Chenung and Pang, 2013). If either party assumes
that the obligations are not fulfilled, they submit a claim as they believe they are entitled for a
time or money compensation (Semple et al., 1994, p.785). There might also be collaborative
conflicts transforming into disputes. The client’s unreasonable requests, nominated parties’
delays, AEC design and supervision delay and consultant’s default in providing information on
time are commonly encountered reasons. Moreover, the documentation often comes deficient in
defining the process for substantial changes in quantities; as well as providing in adequate
number of detailed drawings. In addition to the above, inconsistency between contract bill and
actual quantities, drawings and specifications and in complete BOQ’s may create disputes. In
certain conditions, drawings and BOQ’s do not match and drawing details are not consistent.
Finally, but maybe the most important, is the people factor. There are many cases available
where contractor deliberately keeps omissible items in the bills of quantities. The specifications
are hidden, or not met on purpose, and the gap between the actual work and BOQ are hidden by
the contractor. Acceleration costs of contractors may also be very unrealistic. Not only the
contractors are opportunist, but also the clients show strict standing by rejecting the extension
of time claims, or financial claims instantly. They tend to avid reimbursement or extension
borne from the extra work requests. Furthermore, the project members’ psychological
conditions should also be good. Being nervous, impatient or overactive may result in some
issues, escalated to claims (Chenung and Pang, 2013).

3.2 Commonly encountered dispute types and Reasons

Abi - Karam (2001) stated that, disputes related to the time and/ or cost overruns, scope of the
project, budget and schedule are common in the construction industry. The claims are the core
of the disputes. Hence Tezalaar and Snijders (2010) stated that, as per Sarat (1984), a dispute
arises only when a claim is made from someone. Investigating the UAE market, Zeneldin
(2006) stated, the most important claim types that require dispute resolution are; changes, extra
works, delays, different site conditions, acceleration and contract ambiguity respectively.
However, he also mentioned that the frequency order of the stated claims are ; Contract
ambiguity claims, Delay claims, Acceleration claims, Changes claims, Extra work claims and
different site condition claims respectively.

Table 1: Common dispute reasons classified

 Allow the design team to take their time.

 Enable effective quality control on design procedures. DESIGN RELATED

 Maintain build ability within the project phases
  Clear out the contract ambiguity.

 Fully understand the contract before signing and get CONTRACT RELATED
opinion from a third party.

 Make the necessary input in to the contract as per

previous experience.

 Maintain a cooperation and problem solving APPROACH RELATED

environment.

 Plan for possible schedule bottle necks. PLANNING RELATED

 Get variation orders signed before proceeding. CHANGE ORDERS RELATED

 Use proper recording system at all stages. INFORMATION RECORDING

RELATED

Source: Zaneldin, 2006

3.3 Avoiding Disputes

The disturbance caused by disputes to projects is invariably significant. The stakeholders

require their projects running smoothly with no risk of investment failure (AAA, 2007). When
an issue rises, the event becomes a conflict where the parties have different opinions. At this
very early stage, when the involved parties conflict on certain issues, it should be managed in a
convenient manner in order to avoid the disputes. Cheung (1998) mentioned that there are
techniques to avoid disputes from arising. The objective of these techniques is to create a
coordination platform where team work is efficient. Grisham (2013) also mentioned that the
disputed issues can be approached with three strategies, which are, managing, resolving or
delaying settlement as per the situation. He also underlined that, due to previous experiences,
taking an early action is the best approach.

Appropriate procurement systems are known as helpful in avoiding disputes. Yusof et al.
(2011) stated that as per Leong (2003), usage of procurement systems has also great
advantages, rather than the conflict management and dispute resolution methods, as they
prevent the disputes to arise during the project delivery. AAA (2007) also suggested that
selection of the procurement method is essential in dispute avoidance. Design and built option
was adopted in US by private sector which was followed by the government projects, resulted
in less number of cases. Lately partnering also became popular in handling conflicts and
avoiding disputes. Stipanowich and Matthews (1997) stated that, approaches like partnering
increase cooperation and discussions, puts mutual objectives and avoid adversarial situations.
Moreover, Cheung (1999) illustrated a step by step approach to disputes as seen in figure 2.
The lower step recommends preventing disputes via methods such as partnering, cooperation
incentives and proper risk allocation.
 4. SETTLING DISPUTES

Brooker and Lavers (1997) stated that disputes occupy important place within the construction
industry. They continued that disputes significantly affect disputants, developers, contractors,
sub contractors, suppliers, consultants, owners and future occupiers. Hence, they should be
settled with least harm to each stake holder .As per Galloway (2013), the disputes in the
construction industry can be settled through different methodologies such as; litigation,
arbitration, mediation or negotiation. Cheung (1998) stated that, arbitration and litigation are
effective formal dispute resolution systems for construction industry. However, he also stated
that, these methods are long lasting and costly; hence Alternative Dispute Resolution (ADR)
mechanisms are developed.

Figure 2 illustrates the common dispute resolution methods. They start with negotiation, and
escalate up to litigation as a final remedy. Once the steps escalatee, the method tends to be
costlier and more adversarial.

Figure 1: Dispute resolution steps in CI (Source: Cheung, 1999)

4.1 Barriers of dispute resolution

Galloway (2013) stated that, each party in the construction takes a standing due to their own
understanding on the signed contract. Hence most of the construction disputes are difficult to
resolve. The resolution process is wide open to manipulation from either party. Submitting vast
amount of paperwork confuses the tribunal and blurs the image. Retrieval of information is very
difficult in a project. Vast amount of information is stored in a project and it is usually not
straight forward to substantiate a claim. Moreover, visualization of the causes and effects are
the only way to present the claimant’s narration (Gibbs et al., 2011)
Haidar (2011) stated that, proving the entitled claim is a heavy weight on the claimants’
shoulders. He continued that, as the evidence and presentation is strong, the chance of winning
is higher. The importance of the contemporary records during the resolution process is crucial.
However, this side is being abused by the weak participant; generally by the defendant.
Submission of much unnecessary paperwork to delay resolution process is a common applied
strategy. During the construction of projects, the collaboration of disciplines is not enough and
the work programs are not effectively implemented through the process. Although important
governmental projects or land mark private sector projects adopt the updated techniques,
majority of the construction sector is not using the new tools.

Depending on the location and the type of resolution method, language and translations can
also be a problem during claiming. The translation mistakes and difficulties may cause
interpretation dilemmas. Due to the diverse nature of different parties involved in the
constructions, avoiding conflicts and disputes are not possible. However, it is possible to
systematically manage potential issues in better manner, to reduce or avoid dispute occurrence
probability at the earliest stages (Yusof et al., 2011).

5. BIMing Disputes

‘BIM facilitates the communication of design and the coordination of a working system, cost
estimation, and the automated generation of bills. During the construction phase of a project,
these models can be helpful in analyzing construction operations by allowing project managers
to determine site-management strategies, facilitate contractor coordination, plan site logistics,
access routing, and study the integrity of a schedule and construction sequences’ (Golparvar-
Fard et al., 2011). Using BIM models, construction process is faster and more effective.
Sharing information is very easy. The design proposals can be simulated, analyzed resulting
better solutions. The whole life costing is also under control from the beginning. The quality of
production is in higher standards since it provides high flexibility. In case of fabrication, the
digitally prepared model can be used for manufacturing process of structural elements and
assembly. All the information stored can also be easily retrieved and used during facilities
management (Azhar, 2011, p.243)

The structure of a regularly updated BIM model of the project presents all the details of the
project in the particular time frame. The process becomes easier to control. BIM minimizes the
human participation as it automates the major part of the process. Hence, the perception is that,
with BIM usage; projects are better monitored, controlled and updated during the lifecycle
(Shourangiz et al., 2011, p.79). Hartmann et al. (2012) stated that, quantity surveyors can obtain
the estimation data instantly from the BIM model and exert them to cost estimation software.
Goedert and Meadati (2008) mentioned BIM as a useful tool to manage and retrieve
information for the contractors or clients. They also stated that, apart from visual details, the
information such as schedule, cost estimations can be added to BIM model and retrieved when
necessary. The model goes beyond the traditional 3D perception. The complete project is
structured on a digital platform. All of the elements forming a project are embedded in a model
inside out. This is done by combining architectural, structural, mechanical, electrical, plumbing,
and HVAC designs under a single model via particular software, and under a proper platform.
Moreover, the entire information, cost, schedule, resources, progress and more can be added to
the model. The model gets the information tag by doing it so. Gibbs et.al (2011) stated that, as
per NBS 2011 report, BIM was defined as rich information model. The information can involve
contracts, specifications, staff, schedule, quantities, cost, and design data. Integrating all the
parties within the project is an important approach for dispute avoidance. As per Azhar (2011),
all stakeholders are encouraged to do so via BIM. This potential of BIM achieves cooperative
platform between the parties who were acting adversarial on encountered incidents before.

In the construction projects, usual variation changes result detour from the objectives. Time and
cost overrun, quality defects may come out and other unwanted incidents are encountered.
Academic studies analyze the sources and impacts of the changes, and it is concluded that;
major changes are due to client requests on various reasons such as new ideas, reducing cost or
lack of visual perception of the project at initial stages. 2D drawings have limitations, and BIM
was able to solve vast numbers of design related incidents. A major advantage of BIM is that
new information flows in the work can be integrated to the existing model very efficiently.
(Shourangiz et al., 2011, p.79). As per Greenwald (2013), BIM not only enables cost saving and
effective time management, but also reduces disputes significantly. This is done through
solution of incidents, clash analysis and early detection of issues. Khoshnava et al. (n.d) also
stated that BIM models significantly reduce the number of events that might become conflicts,
as it involves all core elements of data.

As listed in our previous section on disputes, time and cost over runs and design related issues
are the major dispute sources in the construction industry. Along with BIM model, the
controlled deliverables will result less risk in dispute occurrence. Azhar (2011) mentioned that,
as per Azhar and Nadeem et al. (2008), using BIM, project cost, productivity, quality, project
duration can be controlled within the objectives. The project can even be completed or many
months waited, hoping for the settlement of the disputes in a kind manner. BIMing disputes are
not very different than BIMing a project. Shen and Issa (2010) stated that, during detailed
estimation in a project, huge amount of time is dedicated on visualizing the drawings for
understanding and clarifying the related work. They continued, BIM software has built-in cost
estimating features. Material quantities are automatically extracted and updated when any
changes are made in the model.

Determination and evaluation of the claimed events within the resolution process will be
possible through the BIM model. As stated by Azhar (2011), BIM programs include cost
estimation options. The quantification of changed items in a project can be easily retrieved.
During the evaluation of disputed claims, it can be used efficiently. Greenwald (2013) stated
that, the construction industry pays a heavy price for the fragmentation of dispute resolution
processes. The solution requires a dynamic approach to the complexity. BIM projects provide
new opportunities for significant advances in dispute resolution procedures. As per NBS (2013)
research, the BIM also helps breaking the language barriers by the help of combined structured
data, and visualization. As a barrier of dispute resolution, the effect of different languages will
be minor.

5.1 Case Study

5.1.1 Outline Details of the Project

The studied case involves a residential and commercial building project constructed in Dubai /
UAE. The contractor was selected as per the traditional procurement route and via the lowest
bid. The duration granted was 13.5 months. Unfortunately, the project incurred many incidents
that transformed in to disputes. The duration to complete the project prolonged 2 more years
than the contractual time frame. The resolution was made via arbitration causing the client and
the contractor to spend effort on the project even after completion.

5.1.2 Data Collection

The reviewed documentation included work schedules, site reports, payment certificates,
project NOC’s (no objection certificates) and authority permits, correspondences between
client and contractor, correspondences between consultant and contractor, 2D drawings and
contract documents. The disputed events are investigated in depth, to understand the effects on
the project’s delivery.

The major disputed incidents were as follows:

 Unforeseen site conditions: Exposed cables during shoring and excavation works. The
contractor suspends the works until the local electricity provider changes the routes.

 Change orders from the client: Revised floors and conversion of units from residential
to commercial. The works, suspends partially, and faces disruption on linked activities.

 Extra work request from the client: An extra floor added to the building. Project went
under revision, and new authority approvals obtained.

 Payments delays: Client suspended interim payments. The issue caused cash flow
problems, and the contractor suspended the activity on site.
Table 2: Disputed incidents and delays

Activity Start Finish Days Total Days Days Days

Works Worked with Works
Disruption Delayed
Suspended

Date of Contract 22-Jan-06 22-Jan-06 1

Final Demarcation 14-Feb-06 14-Feb-06 1 24

Commencement Date 15-Feb-06 15-Feb-06 1

Mobilization Period 15-Feb-06 02-Mar-06 15

Excavation Works 02-Mar-06 10-Mar-06 8

Delays due to Exposed 10-Mar-06 10-May- 61 61 61

Electricity Cables 06

Works Commenced after 10-May- 14-Jan-07 249

Electricity works 06

Disruption of Works due to 14-Jan-07 31-Dec-07 323 323 214

Additional Floor and
Supermarket Revisions (%
66 Efficiency Loss
Assumed)

Client Stopped Paying to 01-Jan-08 01-Feb-09 750 750

Contractor , Project
Delay due to revisions
continued

Completion Certificate 10-Mar-10 10-Mar-10 1

TOTAL 15-Mar-06 10-Mar-10 725

The contractor raised claims which were not incorporated by the client. The engineer’s
recommendation did not satisfy both parties, and the arbitration method was used as the
resolution, as stated in the contract.
From the existing 2D CAD drawings a BIM model was created. The studied documentations
and created model provided both qualitative and quantitative measures. This data is used to
evaluate the comparative benefit of the BIM model in claiming and dispute resolution. To
investigate the advantages of having a BIM model during the claiming and dispute resolution
process, a comparative analysis approach was conducted with BIM and no BIM. Also, two BIM
models were created to spark the differences of the original and as built situations.

The figure 2 is the framework prepared for the comparative study.

Coyne (2008) suggested that as to analyze delays in constructions, as-built versus as-built
analysis can be performed during or after the construction of the project. This analysis method
enables quantification of the issues through the planned versus actual situation.

Figure 2: Framework for the proposed approach with BIM

The original and as-built drawings were obtained and modelled. All the information required
was then extracted from the models. The combined as built versus original models were used to
make the issues explicit during claiming. The obtained BIM models and colour coded drawings
were evaluated both qualitatively and quantitatively. Change claims, variations, impacts of
events made clearly visible in the comparative analysis. Events were visualized resulting easy
to understand, estimate, comment and decide on the incidents. As mentioned earlier, the claims
and resolution process counts on documentation heavily, in order to fully understand the real
impacts. The models overcome this sophisticated phase.
The comparative benefit was also shown in following pie charts. Figures 3 show the steps and
durations taken. The comparison is made between BIM-led and traditional approaches, for
claim preparation. The steps are taken in order to submit claims to the arbitrational tribunal.
The steps and durations are shown in the pie chart. Total duration taken for the preparations
was 27 days, which included site visit, document study and estimations. Same process was gone
through further to the creation of the BIM model. The BIM model created as shown in the
figure 2 is used during the claim preparation for the dispute resolution. The saved duration was
13 days, being 48% of the traditional method. The major time saving was from the information
collection steps, which included site visits and correspondence analysis. The estimations were
also found more accurate and made on a faster platform.

Figure 3: Claim preparation steps and duration in traditional method

5.2 Case Study Outcome

Further to the study, it is seen that; the major causes of the disputes are due to reasons that
could be avoided through a properly stored, retrieved and presented information platform.
Moreover, substantiation of the claim is actually visualizing the incidents to evaluate the liable
and compensate able party. The biggest challenge of the tribunal during the resolution was fully
understanding the effects and causes of the incidents. During the arbitration proceedings; we
have noted that the process is also quite old and did not acquire new age techniques. The
plaintiff and the defendant were trying to claim certain issues that they do not have the right to
claim for. Both parties submitted documentation of almost everything; 3 to 4 binders, consisting
of hundreds of pages. Considering the number of documents used in a project, it was causing
serious disturbance for resolution authority. The discussion between the claimant and the
defended usually stuck in certain activities or chronology and the events are being criticized in
a tendentious manner. The presentation of the actual situations in a particular time was also
great hassle. Although computer aided schedules were being used during the project’s
procurement, comparing to a BIM model, the detail was less, and reflection on the arbitration
process was low. A BIM model created in the project, even during the dispute settlement
process, helped to identify the actual incidents and impacts of the incurred events. The prepared
claims were more accurate, easy to present and clearly visible to the resolution authority.

6. Conclusion

Claims, disputes and resolution challenges were studied within the construction industry.
Although preventing efforts are there such as collaborating platforms, partnering, usually
disputes are not possible to avoid. BIM was evaluated to understand whether it can prevent or
ease claiming and resolving the disputes. When there are claims, prepared on disputed
incidents, visualization of the incurred events and their consequences can be obtained from the
BIM model. This will give correct and clean perception of events. Moreover, the data required
for the preparation of the claims will also be accurate as well as easy to obtain. Moreover, as an
important time consuming procedure, acquiring the image of the events within a particular
period is with less effort if BIM model is used. The literature and the case study explicitly
conclude in the same result. Hence, it is obviously concluded that; BIM eases claiming and
dispute resolution procedure, since it stores and visualizes the changes, planned and actual
sequences, periods and activities. The adoption of BIM in the fore coming projects will be
increased as the industry will recognize the model as a problem solving platform beyond
commonly known benefits. Even no BIM model exists, as the common practice in the market, it
can be created just for dispute resolution process for easy claim preparation, avoiding
complexity in claim’s substantiation and a visual presentation. The issues can be witnessed, and
the documentation is still warm. The party resolving the claim i.e. arbitrator(s), will also benefit
in understanding the disputed issues and effects through the model. The model can also be
converted into multi dimensional by adding time (4 D) and cost (5 D) to present more details.
Creating wider and new ways of work, BIM can make the dispute reasons explicit and will
impartially show the liable party. Hence the solutions will be supported by the other
stakeholders.

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