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THE EARLY RESOLUTION OF CONSTRUCTION DISPUTES – HAS THE HIGH COURT CHANGED THE GAME? *
Partner, Pinsent Masons
Disagreements on construction projects can arise at any time. 1 The decision whether to crystallise disagreements as disputes under the relevant contract, and to refer issues to dispute resolution, turns on a number of factors typically including the relationship, the magnitude of the issue and its consequence, the volume of work to complete and the period of time left within which the parties are to work together. 2 Contractual time bars may also inform such a decision.
Notwithstanding those factors, it is generally accepted that the earlier a dispute is resolved, the more effective the outcome for all parties, and for the project. 3 Accordingly, there is logic and merit in addressing and resolving disputes progressively as they arise, rather than “stockpiling” issues and disputes for resolution at the conclusion of the project. 4 Of course, resolving construction disputes is a time consuming and complex exercise and construction projects are dynamic. The issues faced by parties on projects arise and resolve at different points in time and in different ways during the life of a project. If a dispute is commenced early, by the time a dispute is finally adjudged, the landscape and the relevant issues in the disputes may have significantly changed from the time it was first notified under the contract.
Dispute resolution processes therefore need flexibility. Parties need the rights to amendment their claims and approach, as and when issues change
* An earlier version of this paper was submitted to the Society of Construction Law (Australia) as part of the 2019 Brooking Prize and was highly commended.
1 Mead, P, “Current trends in risk allocation in construction projects and their implications for industry participants”, (2007) 23(1) Construction Law Journal 23, 28.
2 Harmon, K, “Resolution of construction disputes: A review of current methodologies”, (2003) 3(4) Leadership and Management in Engineering 187, 188.
3 McGeorge, D, et al, “Dispute avoidance and resolution a literature review,” (Report No 1) CRC for Construction Innovation 2007 8; See also, New South Wales Government, “Contract Dispute Resolution” (Procurement Practice Guide, New South Wales Government, August 2013) 1 https://www.procurepoint.nsw.gov.au/system/files/documents/practice_guide_contract_dispute_resolution_ed2.pdf (last accessed 26 November 2019).
4 Dwight, P, “Commercial Dispute Resolution in Australia: some trends and misconceptions”, (1989) 1(1) Bond Law Review Article 1, 4.
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