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conflict resolution disputes in construction

Complete Guide to Conflict Resolution: How to Avoid Disputes in Construction  

How to Win (Construction) Friends and Influence Projects

Construction is one of the most dispute-ridden industries by far. Disputes in construction frequently result in protracted negotiations, broken contracts, contract revisions, design changes and even litigation.

In fact, on average, the global average value of disputes was $42.8 million, according to Arcadis’ 2017 Global Construction Disputes Report.

Despite the discouraging numbers, it goes without saying that such proceedings are riddled with decreased productivity, hurt feelings (yes, it happens to the best of us), broken relationships, lost opportunities and deterioration of a brand’s reputation.

Overall, the ingredients of a perfect day.

Hold on…no. The ingredients of a terrible day, and in fact, most likely a terrible month or year. Despite the serious negative consequences that coincide with disputes in construction, many companies are unable to streamline their communication and building processes to help avoid dispute.

Now, conflict is a normal in life and on jobsites, of course. Anywhere you find humans, you’ll find those who dislike or take offense to others for a variety of reasons. Conflict can also help teams to rise above the challenges and outperform what’s expected. The problem is when such normal social tiffs escalate to severed relationships and litigation, which for obvious reasons you want to avoid unless absolutely, positively, end-of-the-road necessary.

Luckily, we’ve got a few answers for you. Below, we’ll discuss 6 ways to handle conflict when it occurs, as well as a number of steps to help you institutionalize conflict avoidance and keep construction disputes from happening in the first place.

Why Avoid Conflict?

But first, why avoid conflict? Could it be we’re overreacting, and actually disputes have a good place in construction?

Well, yes and no. Yes, in the sense that any company should stand up for itself and its workers. No, in the sense that the vast majority of the time, however, that shouldn’t require serious dispute. Legal disputes are expensive and time-consuming. Sometimes it takes less time to build an entire structure than it does to resolve the issues that attend upon it. In fact, the global average for a construction dispute is 14 months. That is a lot of wasted time and money and doesn’t even take into account the smaller unreported issues that crop up on the jobsite every day.

The takeaway? While it’s essential to thoughtfully resolve conflicts as they arise, most of the time conflicts are massively obstructive and wasteful of resources. Think how much more successful your company would be if each project cut disputes down by a third, half, two-thirds or more. So why, then, are they so prevalent?

Common Causes of Disputes in Construction

As you might imagine, disputes in construction hail from all corners of the job and nature of the industry. As with any other human endeavor, conflict arises anywhere there exists misunderstanding, unrealistic or mistaken expectations, personality clashes, unclear hierarchies, poor division of labor or faulty workflow. Some of the most common causes include:

  • Poor contract administration, meaning the employer, contractor or subcontractor fails to understand and/or comply with contractual obligations
  • Errors and omission in design, which means projects are out of compliance, fail to meet specifications or just don’t match stakeholder expectations
  • Double meaning in specifications, meaning specs were not clear in the first place
  • Sloppy quality standards that fail to catch and correct mistakes on a reasonable timeline
  • Lack of communication between owners, investors, contractors, subcontractors and laborers

Any of these can halt a construction project’s flow and significantly disrupt the timeline. Frequently, disputes in construction involve more than one of the above factors, which delays the schedule further. Now, let’s take a look at how to swiftly resolve conflicts and disputes should they occur.

6 Ways to Resolve Disputes Quickly and Avoid Litigation

Disputes in construction arise; that’s just a fact. While you may want to complain, delay a resolution or even forget about them entirely, the way in which you respond (and how quickly) makes a huge difference. Whether your greatest concern is losing a client or causing a PR nightmare or both, the following six steps can substantially reduce the fallout and impact:

1. Act fast

When problems arise, it’s important to start the resolution process sooner rather than later. The longer you wait, the more expensive and time-consuming conflicts become. Plus, each day that passes is more time for each party to cement their point of view and become more intractable. As soon as you recognize a problem, you should call a meeting, talk to the parties involved, review contracts for details, just do something.

2. Get to the core of the issue

Disputes in construction are often unclear at first look. At times it can seem like a “he said” “she said” ordeal. Nonetheless, construction disputes hardly arise out of nothing. Alternatively, it may seem like a cut-and-dry case of so-and-so’s fault, when really it isn’t. First, find out why there is a disagreement, then make sure both parties “agree” on at least the core issue before moving forward with a solution.

3. Get parties to listen to one another

Throughout the process, mediate to ensure both parties listen to one another so that they can take that greater understanding forward into the future. Be firm about interruptions; everyone must hear the other out. No one party should dictate a resolution; rather, everyone should get a say. This builds trust and helps to avoid a redux in future.

4. Keep conflicts on a professional level

This is admittedly hard to do sometimes, especially when issues hit at the core of professional responsibility or personal character. Still, don’t let teams get too heated. Avoid any personal issues and conflicts by always bringing it back to work. Should a member involved in the conflict bring the conversation to a personal place, ask them to move on or even step away until they cool down for a period of time.

5. Consider a compromise or collaborate to problem solve

There are two effective strategies when it comes to resolving disputes in construction: compromise and problem-solve. The first means parties give up or give in until they meet in the middle, while the second means parties work together to find an alternative solution. While there’s no one right away, determine which will bring the quickest and cleanest end to the conflict.

6. View litigation as the last resort

Make sure you know if you have a dispute resolution clause in your contract. Always follow the right process determined in your contract before doing anything rash. If you’ve looked through the contract and it seems like you have no choice but to “go there,” first check out this helpful list of dispute resolution methods.

How to Develop Institutionalized Conflict Avoidance

Hands-down the best way to approach disputes in construction, however, is not to have any.

Sound like a miracle? Not so. At heart, disputes in construction are about a flaw in teamwork, communication or project management, and flaws can be addressed. Just as you might correct a design process by identifying the problem and implementing a safeguard, so too can you take this approach in the building process. Here’s how.

Build Teamwork

Teamwork is not only essential for a successful project, but it’s also critical to avoid disputes in construction. Chief Executive Ron Baden Hellard of Polycon Group of Consultants in London, England said, “Construction has a built-in recipe for conflict, but good management is the preventive medicine of dispute.” Construction dispute avoidance must come from management, whose charge it is to implement techniques that avoid it.

You should consider changing to a collaborative construction delivery method like Integrated Project Delivery (IPD), which places all project stakeholders and workflows on the same level. “Each group of professionals, contractors and subcontractors have developed customs and practices which frequently continue when the building ‘team’ carries out what is a combined operation for essentially prototype construction,” continues Hellard. “Frequently the building owner is the only ‘non-expert’ in the team yet it is he who has to make the key project decisions.”

Traditional delivery methods like design-bid-build can at times lead to conflict. Modern approaches to delivery, like IPD, helps distribute risk in projects while designing a team-friendly construction contract agreement will further reduce the chances of dispute.

Use Advanced Software

Cutting-edge software, such as that which enables building information modeling (BIM) substantially improves the process from the beginning, allowing everyone to provide input earlier on and providing better visualization. This results in better outcomes, less rework and fewer disputes.

Also, by digitizing documents and getting rid of the need for a “paper trail,” you improve documentation processes and have better references. Furthermore, better documentation also helps back up the work that has been completed. As a result, disputes are reduced because there are fewer questions on what has been completed and what needs to be done.

Enroll Your Team in Formal Conflict Resolution Training

If conflicts appear to be an issue constantly, maybe it’s time to invest in conflict resolution training. This puts a formalized approach to conflicts and educates workers on how they can better handle themselves in the future so that you don’t always have to come up with a resolution approach on the spot.

Set Quality Standards

Standard procedures, processes, workflows, machines and equipment devices ensure teams are working from the same platform, so there is less concern over quality. With better quality control, there’s less likely to be issues down the road. Looking to improve your standards on projects, read our handy guide on a how-to on standardization.

Invest in Third-Party Reviews

A third-party reviewer is someone who is not involved in any part of the design, procurement, fabrication, construction or installation process. They can be included either to consult, inspect or even look over conflicts, should they arise. A third party involvement establishes a middle ground is examining the quality of construction so things can be fairly judged with little dispute over the decision.

Solving Disputes in Construction: An Ongoing Endeavor

At the end of the day, it is impossible to avoid all disputes in construction. If you’ve been in the game long enough, you’re likely to encounter conflict at some point in your construction career. That said, you can theoretically avoid many of the more common dispute types altogether–such as poor communication, which you can remedy with up-to-the-minute construction productivity software. In the case of knottier problems, acting fast to minimize the damage can make a substantial difference in how much time and money you waste on construction issues.

If you’d like more information, Construction Conflict Management and Resolution is always worth a read. Mainly, though, the best approach is to keep open ears for the needs of other stakeholders and remain willing to address issues as quickly as possible as they arise.

Grace Ellis

As a Content Marketing Manager at PlanGrid, Grace is the managing editor for the PlanGrid Construction Productivity Blog. With over eight years of experience in marketing, communications and PR for technology companies, she is specialized in high-quality content creation across both traditional and digital media platforms.

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