Construction Conflict Management and Resolution

P. Fenn, R. Gameson

• Publisher: Routledge
• Year: 2003
• eBook ISBN: 9781135827069
• Edition: 1
• Topic: Architecture
• Subtopic: Architecture General

This book brings together over 40 papers presented at the 1992 International Construction Conflict Management & Resolution Conference held in Manchester, UK. Six themes are covered, including alternative dispute resolution, conflict management, claims procedures, litigation and arbitration, international construction, and education and the future.
With papers from arbitrators, architects, barristers, civil engineers, chartered surveyors and solicitors, this book represents the first multi-disciplinary body of knowledge on Construction Conflict and will act as a unique source of reference for both legal and construction professionals.

Part One
Introduction

This section introduces the theme of construction conflict setting the scene for the remainder of the book.

‘Construction conflict: management and resolution—analysis and solutions’ (Lavers) is a rapporteurs report on the overall content of the book, which attempts to draw together themes and conclusions from the numerous approaches proffered by the authors.

‘The Construction Industry’ (Newey), the conference opening address, discusses the nature of construction conflict and disputes.

CONSTRUCTION CONFLICT: MANAGEMENT AND RESOLUTION ANALYSIS AND SOLUTIONS

ANTHONY LAYERS
School of Estate Management, Oxford Polytechnic, U.K.

Abstract

This paper attempts to draw together the principal themes of the UMIST First International Conference on Construction Conflict: Management and Resolution and to identify the most important perspectives of the papers presented. The subjects covered include the phenomena of conflict and their management, experiences of traditional resolution mechanisms ie litigation and arbitration. Alternative Dispute Resolution (ADR) and education/attitude changes.

Keywords:

Conflict, Construction Disputes, Conflict Management, Conflict Resolution, Construction Litigation, Arbitration, ADR, Alternative Dispute Resolution, Construction Education.

1
Introduction

The analysis and solutions of the title of this paper are not mine. They are those advanced by the authors of the papers at the UMIST First International Construction Management Conference on Construction Conflict: Management and Resolution. My role in this paper and at the Conference is to try to draw together themes and conclusions from the individual approaches of the respective authors. The themes of this paper are loosely based upon those used for classification of the papers for presentation (where appropriate) and for publication, namely Construction Conflict, Claims, Litigation and Arbitration, Alternative Dispute Resolution (ADR) and Education and Attitude Change.

2
Background

The background against which this conference is held is of a process and an industry in which conflict has risen significantly over the last three decades.

Commentators who have attempted to quantify the extent of conflict are agreed that this has increased, although there are sub-trends which are worthy of note. Peter Fenn¹, in a paper referred to by Fellows² saw a 500% increase in the initiation of litigation in the twenty years to 1986, although cases actually coming to the courts remained approximately constant, which may of course be merely descriptive of their capacity and of the fact that they are working at or near it. Judge Newey’s figures³ show a 100% increase in litigation in the period 1973–80 with increases of approximately 15% per annum in the period 1980–89. Judge Newey, in this paper ascribes the increase in litigation and arbitration at least in part to “changes in Common and Statute Law which have made it easier to bring claims”. Certainly this would be consistent with his figures for 1990 and 1991 which show no increase and a decrease in litigation respectively, which could be seen partly as the result of the brake being applied to negligence claims in tort as a result of D and F Estates v Church of England Commissioners⁴, Department of Environment v Thomas Bates⁵ and Murphy v Brentwood District Council⁶. This sub-trend, although welcomed in some quarters, should not be over-estimated: absence of tortious remedies has created the collateral warranty explosion and viewed from another angle can simply leave injured parties uncompensated. In any event, a reduction in litigation observable from the Official Referees Court does not mean a commensurate reduction in conflict and dispute, nor was Judge Newey suggesting that it does. His reference to companies in liquidation making litigation unprofitable to pursue is surely right and does not indicate a lessening of conflict.

So, the background is one of conflict and of dispute, some of which ends in formal claims, in litigation or arbitration, which is the subject of Section 4 of this paper. Whether this is inevitable or avoidable, positive or negative is discussed in several papers referred to in Section 3 below.

There is dissatisfaction with the existing traditional mechanisms for resolving disputes. That fact underlies many of the papers in Sections 4 and 5 and is strongly articulated by Davies⁷ taking the view of specialist contractors and subcontractors in bemoaning “the arrival in strength of the legal profession” in construction disputes in the early 1980s. It should be noted here that there is a dispute in taxonomy as to what constitute ‘traditional’ and what ‘alternative’ methods. Whereas the majority of authors assimilate arbitration to litigation to distinguish from ADR, Eilenberg⁸ says that ADR “is regarded as including arbitration”. If excessive legalism is perceived as central to the problem⁹, the degree of involvement may be used as an indicator to assist in the classification. Thus the informal tribunals mentioned by Eilenberg in the State of Victoria as excluding legal representation could properly be regarded as part of ADR, whereas similar mechanisms with professional advocates and expert witnesses could be regarded as quasi-litigation; part of the traditional method of resolving disputes to which an alternative is sought. Normally, then arbitration should be assimilated with litigation (and it is, throughout Sections 3, 4 and 5 of this paper), unless features are built into it, such as the exclusion of legal representation, which prevent it acquiring the characteristics mentioned above.

Because of the dissatisfaction with traditional methods of conflict resolution in the construction industry, a wide range of options has been and continues to be explored. The attention of the authors of the papers referred to in Section 6 of this paper is concentrated on the earliest chronological stage of the continuum of a construction project, namely the education and training of the personnel who will be involved, especially the professional consultants. Hancock¹⁰ states that “problems and conflicts within the construction industry are a result of misunderstanding and a lack of perception founded in our education of construction industry professionals”. The basic belief of these authors is that the inculcation of different attitudes can help avoid conflict. The second stage, chronologically, also depends upon avoidance of conflict, more mechanistically through selection and tuning of procurement vehicles; the contractual and other relationships between the parties in a construction project. Colledge¹¹ in particular sees the commercial and contractual relationships between the parties as fundamental to a reduction of conflict and several papers propose techniques for avoidance of disputes through better or more systematic preparation and communication. A simple example of the latter is supplied by Judge Newey: “if an untried technology is to be used, the Employer should be warned and his consent obtained”¹². This suggestion is, of course, redolent of Judge Newey’s decision in Victoria University of Manchester v Hugh Wilson¹³: based on the simple truth that there is less room for subsequent disagreement if the designer ‘takes the client with him/her’.

The next stage assumes that disputes do arise notwithstanding efforts to avoid them, but seeks to reduce any harmful effects. Dispute management is advocated as a means of recognising conflict and dealing with it efficiently. Rahim¹⁴ states that “Organisational conflict must not necessarily be reduced, suppressed or eliminated, but managed to enhance individual, group and organisational effectiveness”. This view can be characterised as ‘pragmatic’ ie accepting the inevitability of disputes and concentrating on their management rather than their complete eradication (although not excluding minimisation).

While it would be artificial and in some situations simply wrong to distinguish between management and resolution of disputes, a difference of emphasis can be observed in some papers between handling a dispute as it arises and its eventual outcome. Baden Hellard¹⁵ advocates the appointment of a contract management adjudicator and the idea of an interim reference point to foresee, identify and manage points of disagreement is explored in more detail by other authors, perhaps most interestingly by Wall¹⁶ (under the heading of ADR) who records the implementation of such a system in Hong Kong. There may here be a difference of taxonomy between those who see this referee as managing disputes as they arise and those who see the purpose as resolution of disputes which have arisen, albeit in an early form. It is not likely that both would be used in the same project and they can properly be regarded as different versions of similar concepts.

Ultimately, on any meaningful analysis of the industry at present, disputes will arise which cannot be nipped in the bud. Valuable work has been done on improving conflict resolution by the authors of these papers. There is research on existing systems of litigation and arbitration such as Quick’s paper¹⁷ on arbitration costs and the Watts and Scrivener¹⁸ paper reviewing construction litigation in the Supreme Courts of New South Wales and Victoria and the Court of Appeal of Australia. There are, of course, advocates of ADR systems, led by Cooper¹⁹ and Mackie²⁰, and there are papers from five countries in this section which offer instructive comparisons in approach. There are proponents too of conflict resolution methods which appear novel but which are in reality older even than litigation and arbitration. Houghton²¹ in his view of the Far East speaks of “the Chinese perspective of compromise”, and other authors, including Nicholson²² have seen the advantages in looking at less antagonistic practices from older, often oriental, civilisations. The reasons for this preference for the avoidance of open conflict may be cultural. Koh Kim Chuan²³ observed this well-known but little understood phenomenon in 1981 when he described “our Chinese mentality” which “abhors any attendance in the Court of Law” and explained this in terms of ‘face’: “‘maint...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Acknowledgements
• Contributors
• Referees
• Preface
• Part One: Introduction
• Part Two: Construction Conflict
• Part Three: Claims, Litigation and Arbitration
• Part Four: Alternative Dispute Resolution
• Part Five: Education