Claims, disputes, arbitration, litigation: these are dreaded procedural pitfalls that often dog construction projects large and small. Not only are they time-consuming to work through, but they’re costly, too: The National Research Council estimates that $4B to $11B is spent annually in resolving these cases in the U.S. market.
At the North American office of Rider Levett Bucknall, the approach we take to avoid or minimize the number of conflicts that end up in post-project arbitration or litigation dispute often centers on using Project Neutrals or independent Dispute Review Boards (DRB).
These individuals are trained, neutral advisors who focus solely on the project, not on any one party’s position. Part psychiatrist, part negotiator, DRBs and Project Neutrals understand, manage, and resolve conflicts caused by normal construction processes in order to avoid disputes. They work with owners, architects, contractors, and consultants to transition the industry-collective mindset from conflict to conflict resolution, and ultimately to dispute avoidance.
Here are five core practices that Project Neutrals and DRBs utilize to keep the peace, while keeping a project on-track.
1. Develop trusting relationships with each stakeholder. When trust levels are high, people tend to be less defensive and are more willing to share information to help find a mutually acceptable solution to a problem. If parties mistrust one another, they often act defensively, focusing solely on their own needs and interests. Creating a working relationship that is trust-based makes conflict management and resolution easier.
2. Play an active, integrated role in the overall project team. If you want to be prepared to handle conflicts, it’s important not to sit passively on the sidelines during the design and construction process. Connecting regularly—through meetings, emails, and phone calls—with key players from the start of a project can establish you as a familiar, concerned, and impartial presence, rather than a biased opportunist or outlier.
3. Communicate clearly. The sheer quantity of documentation and communication generated by construction projects can be massive; the quality of those documents, in terms of clarity and meaning, can be ambiguous, inflammatory, or even overwhelming. Using simple and considerate language can avoid small misunderstandings—and keep them from escalating into major conflicts.
4. Treat all parties equally and fairly. If you demonstrate competence, honesty, and respect for the project and all its stakeholders, people will be confident in your ability to protect their interests and provide fair advice, recommendations, and guidance. This empowers each party to be open to conflict resolution, secure in the knowledge that, if necessary, you can be relied upon to provide sincere and balanced feedback.
5. Serve as a resource to help stakeholders explore mutually acceptable solutions.It’s not easy to challenge the traditionally adversarial culture of the construction industry. If you present people with reasonable and effective options to the expensive, ingrained blame game that pervades the business, you’ll earn the esteem of your professional colleagues and be recognized as a leader in the field.
Employed regularly, these fundamental dispute-avoidance techniques can bring a new harmony to construction projects, resulting in streamlined schedules and enhanced bottom lines.
About the Author: John T. Jozwick, Esq., is Senior Vice President and General Counsel for Rider Levett Bucknall North America. With more than 35 years in the industry, Jozwick provides advisory services to owners, contractors, subcontractors, design professionals, sureties, and attorneys relating to construction projects and disputes. He serves clients as an expert witness, provides alternative dispute resolution services as Arbitrator or Mediator, and provides construction dispute avoidance services as a Dispute Review Board member, Project Neutral, or Independent Certifier.