Professional Documents
Culture Documents
Construction Disputes
Construction Disputes
Construction Disputes
Arise from environmental and behavioral facts.
There are many different causes of disputes in the construction
industry.
Disputes waste money, therefore drain profits and destroy the
relationship and it takes energy away from projects.
Construction delays, variations, efficiency issues and exceeding
cost can be some causes for the dispute to arise in the project.
Typically construction disputes occur between the owner and the
main contractor, subcontractors, sub-subcontractors and design
professionals.
The main source of this problem is the lack of precision in
the contract description between involving parties.
The construction industry has tried a different way to avoid
the disputes.
Currently, construction industry uses building information
modeling (3BM) or 3D modeling and it has significantly
minimized these kinds of disputes.
The reason for construction disputes are being a part of
construction life fall into four categories. Contract Finance
Culture External factors
Definition of dispute (pagtatalo)
Is a misunderstanding between two parties, either contractual or non-
contractual.
Is unable to eliminate because the nature of the construction is full risk
Definition of the dispute may be circumscribed it may inevitably involve
resolution of the matters which may not specifically have been raised into
separate or discrete disputes.
The judicial development of the definition of dispute required to give an
adjudicator threshold jurisdiction has been instrumental in encouraging the
parties to exchange views and facts which support their case, but it can be a
rather blunt instrument for reducing dispute and far hurt of a preadjudication
protocol.
A dispute will not exist until a claim is asserted by one party which is
disputed by the other party.
FACTORS AFFECTING CONSTRUCTION
DISPUTES
Each part will present the case in an abbreviated form. For these,
they seek lawyers or experts. The case is placed on the senior
management of the parties for hearing. After hearing a negotiation
is carried out by the respective management system.
This method will help the disputing parties to see the problem and
after effects of the problem from outside perspective, to make them
understand the severity and potential impact so that an easy
settlement can be made.
If necessary, a neutral party may be employed so that
action will be facilitated and evaluated based on the
needs of the parties.
DISADVANTAGES OF ADJUDICATION
The dispute needs to have been aired between the parties before adjudication can
be commenced.
The adjudicator’s powers are limited.
Court proceedings are still required to enforce the adjudicator’s decision if the
losing party does not pay.
BENEFITS OF ADJUDICATION
Demerits of Adjudication
Before the commencement of adjudication, the dispute has to be
aired between the disputing parties
The adjudicator has limited power
If the part who loses does not pay, court proceedings are necessary to
enforce the decision of the adjudicator
Expert Determination
A procedure in which a narrow and usually technical dispute between parties is
submitted to a jointly retained neutral expert, who, on the consent of the parties,
renders an opinion on the matter.
The third party has expert knowledge of a particular construction issue or subject.
It is often used when there is a valuation dispute.
If an expert is to be used to determine the dispute, the parties will agree this by
contract and will agree that the expert determination will be binding.
Less formal then arbitration.
It is not governed by legislation or procedural rules
Can be effective where parties disagree over technical or engineering issues, or have
different views on what the contract requires, particularly in a long-term contract
where there is considerable benefit to the parties to have a determination part-way
through the contract in order to facilitate future discussions on the same issue.
Benefits of Expert Determination
Less economic way
Less expensive, quick method and less formal
Demerits of Expert Determination
Expert decision less tied to legal processes
Enforcement of expert report cannot be carried out without
court or arbitration
DISADVANTAGES OF EXPERT
DETERMINATION
The use of experts is much less tied to legal processes and
therefore it is more difficult to challenge the decision of an
expert.
An experts report cannot generally be enforced without
further court or arbitration proceedings.
LITIGATION (paglilitis)
Which there are many methods of ADR, court proceedings are still one of the
most common forms of resolving disputes within the construction industry.
The Technology and Construction Court (TCC) is a specialist court which
delays with technology and construction disputes and is governed not only by the
Civil Procedure Rules but also by the Technology and Construction Court Guide.
A Specialist is TCC judge will deal with cases in the TCC.
Disadvantages of Litigation
It is time-consuming
It is not flexible as the process is controlled by procedural and statutory rules
It is costly due to depositions of witnesses not to mention the pre-trial discovery
process
Litigators require high-level of expertise of the law profession
Parties can appeal to decisions made which can make the process time
consuming
MEDIATION (pamamagitan)
The main role of the mediator is to determine the area where both the
parties can compromise with each other. When the discussion goes well
and is ready to have a settlement, this forms the negotiation of an
agreement.
The “mediation from mere negotiation” is the criteria carried out by the
mediator or the process of dispute resolution.
The mediation alternative followers have the opinion that this method
understands and reduces the dispute reasons and future disputes, through
open communication between the parties.
Elements of Mediation
•A Mediator – is a person who conducts the mediation.
•The Mediation party – A Mediation party is a person/s who
participates in mediation. As well as whose consent is
necessary to resolve the dispute. So aside from consent as an
element. There is an adverse party or as we say, there is an
adversarial case. Therefore, there is a cause of action against
another person. Also, there is a remedy after establishing the
cause of action.
•A Record – A piece of information written on a tangible
medium. Or stored in an electronic or other similar medium
or retrievable form.
Mediation exception
The cases exempt or do not qualify for a mediation proceeding are labor disputes,
civil status of persons, the validity of a marriage, legal separation, the
jurisdiction of courts, future legitime, criminal liability, as well as those that
can not compromise under the law.
•Not compulsory;
•Concerns exist around the enforceability of a mediation
agreement;
•All parties must agree to a resolution as the result is not
guaranteed;
•Can be difficult if either party are withholding information;
•Mediation may not be appropriate if one of the parties
required public disclosure;
•Utilizing the services of an unskilled mediator can contribute
to an unproductive resolution;
•An unwillingness of one or both of the parties to
cooperate can make the whole process a waste of time,
effort and money;
•If a solution cannot be achieved then other options are still available;
•Mediation can allow each party to hear the opposing view in a non-
confrontational environment;
•Both parties must sign an agreement of the final
recommendation in order for it to be binding;