27.06.2018

Managing Risk and Dispute Resolution in Construction Projects ….

The best way to manage a dispute is not to have one.

Construction projects, however, abound with potential areas for dispute.

There are numerous risks on construction projects that may give rise to disputes. These include (non-exhaustively):

• The parties — are they financially sound, qualified and experienced?
• Project unknowns – what are the unknowns on the project that could impact time and cost – ground conditions, weather, supply chain, gaps in design documentation?
• Site issues – are there any site-related issues that might delay the project?
• Project requirements – are there project requirements that increase the likelihood of disputes?
• Are there any regulatory risks that may cause unanticipated delays?

These risks present themselves in one way or another to all parties on the project – whether Principal, Contractor, Consultant or Subcontractor. In order to minimise the likelihood of disputes down the line, risks need to be recognised, evaluated and managed at all stages of the construction project. This paper considers strategies for minimisation, allocation and management of risk from contractual negotiation through performance of the project and also considers the various mechanisms for resolving any disputes should these, nonetheless, arise.

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