The Construction, Building and Real Estate Research Conference of the Royal Institution of Chartered Surveyors Held at Dauphine

Universit, Paris, 2-3 September 2010

ISBN 978-1-84219-619-9 RICS 12 Great George Street London SW1P 3AD United Kingdom www.rics.org/cobra September 2010

The RICS COBRA Conference is held annually. The aim of COBRA is to provide a platform for the dissemination of original research and new developments within the specific disciplines, sub-disciplines or field of study of:

Management of the construction process

Cost and value management Building technology Legal aspects of construction and procurement Public private partnerships Health and safety Procurement Risk management Project management

The built asset

Property investment theory and practice Indirect property investment Property market forecasting Property pricing and appraisal Law of property, housing and land use planning Urban development Planning and property markets Financial analysis of the property market and property assets The dynamics of residential property markets Global comparative analysis of property markets Building occupation Sustainability and real estate Sustainability and environmental law Building performance

The property industry

Information technology Innovation in education and training Human and organisational aspects of the industry Alternative dispute resolution and conflict management Professional education and training

Peer review process All papers submitted to COBRA were subjected to a double-blind (peer review) refereeing process. Referees were drawn from an expert panel, representing respected academics from the construction and building research community. The conference organisers wish to extend their appreciation to the following members of the panel for their work, which is invaluable to the success of COBRA.

Rifat Akbiyikli Rafid Al Khaddar Ahmed Al Shammaa Tony Auchterlounie Kwasi Gyau Baffour Awuah Kabir Bala Juerg Bernet John Boon Douw Boshoff Richard Burt Judith Callanan Kate Carter Keith Cattell Antoinette Charles Fiona Cheung Sai On Cheung Samuel Chikafalimani Ifte Choudhury Chris Cloete Alan Coday Michael Coffey Nigel Craig Ayirebi Dansoh Peter Davis Peter Defoe Grace Ding Hemanta Doloi John Dye Peter Edwards Charles Egbu Ola Fagbenle Ben Farrow Peter Fenn Peter Fewings

Sakarya University, Turkey Liverpool John Moores University, UK Liverpool John Moores University, UK University of Bolton, UK University of Wolverhampton, UK Ahmadu Bello University, Nigeria Danube University Krems, Austria UNITEC, New Zealand University of Pretoria, South Africa Auburn University, USA RMIT University, Australia Heriot-Watt University, UK University of Cape Town, South Africa Glasgow Caledonian University, UK Queensland University of Technology, Australia City University of Hong Kong University of Pretoria, South Africa Texas A and M University, USA University of Pretoria, South Africa Anglia Ruskin University, UK Anglia Ruskin University, UK Glasgow Caledonian University, UK KNUST, Ghana Curtin University, Australia Calford Seaden, UK University of Technology Sydney, Australia University of Melbourne, Australia TPS Consult, UK RMIT, Australia University of Salford, UK Covenant University, Nigeria Auburn University, USA University of Manchester, UK University of the West of England, UK

Peter Fisher Chris Fortune Valerie Francis Rod Gameson Abdulkadir Ganah Seung Hon Han Anthony Hatfield Theo Haupt Dries Hauptfleisch Paul Holley Danie Hoffman Keith Hogg Alan Hore Bon-Gang Hwang Joseph Igwe Adi Irfan Javier Irizarry Usman Isah David Jenkins Godfaurd John Keith Jones Dean Kashiwagi Nthatisi Khatleli Mohammed Kishk Andrew Knight Scott Kramer Esra Kurul Richard Laing Terence Lam Veerasak Likhitruangsilp John Littlewood Junshan Liu Champika Liyanage Greg Lloyd S M Lo Mok Ken Loong Martin Loosemore David Manase Donny Mangitung Patrick Manu Tinus Maritz Hendrik Marx Ludwig Martin Wilfred Matipa Steven McCabe Annie McCartney Andrew McCoy Enda McKenna Kathy Michell Roy Morledge

University of Northumbria, UK University of Salford, UK University of Melbourne, Australia University of Wolverhampton, UK University of Central Lancashire, UK Yonsei University, South Korea University of Wolverhampton, UK Cape Peninsula University of Technology, South Africa University of the Free State, South Africa Auburn University, USA University of Pretoria, South Africa University of Northumbria, UK Construction IT Alliance, Ireland National University of Singapore University of Lagos, Nigeria Universiti Kebangsaan Malaysia, Malaysia Georgia Institute of Technology, USA University of Manchester, UK University of Glamorgan, UK University of Central Lancashire, UK University of Greenwich, UK Arizona State University, USA University of Cape Town, South Africa Robert Gordons University, UK Nottingham Trent University, UK Auburn University, USA Oxford Brookes University, UK Robert Gordons University, UK Anglia Ruskin University, UK Chulalongkorn University, Thailand University of Wales Institute, Cardiff, UK Auburn University, USA University of Central Lancashire, UK University of Ulster, UK City University of Hong Kong Yonsei University, South Korea University of New South Wales, Australia Glasgow Caledonian University, UK Universitas Tadulako, Malaysia University of Wolverhampton, UK University of Pretoria, South Africa University of the Free State. South Africa Cape Peninsula University of Technology, South Africa Liverpool John Moores University, UK Birmingham City University, UK University of Glamorgan, UK Virginia Tech, USA Queens University Belfast, UK University of Cape Town, South Africa Nottingham Trent University, UK

Michael Murray Saka Najimu Stanley Njuangang Henry Odeyinka Ayodejo Ojo Michael Oladokun Alfred Olatunji Austin Otegbulu Beliz Ozorhon Obinna Ozumba Robert Pearl Srinath Perera Joanna Poon Keith Potts Elena de la Poza Plaza Matthijs Prins Hendrik Prinsloo Richard Reed Zhaomin Ren Herbert Robinson Kathryn Robson Simon Robson David Root Kathy Roper Steve Rowlinson Paul Royston Paul Ryall Amrit Sagoo Alfredo Serpell Winston Shakantu Yvonne Simpson John Smallwood Heather Smeaton-Webb Bruce Smith Melanie Smith Hedley Smyth John Spillane Suresh Subashini Kenneth Sullivan Joe Tah Derek Thomson Matthew Tucker Chika Udeaja Basie Verster Francois Viruly John Wall Sara Wilkinson Trefor Williams

University of Strathclyde, UK Glasgow Caledonian University, UK University of Central Lancashire, UK University of Ulster, UK Ministry of National Development, Seychelles University of Uyo, Nigeria Newcastle University, Australia Bogazici University, Turkey University of the Witwatersrand, South Africa University of KwaZulu, Natal, South Africa Northumbria University, UK Nottingham Trent University, UK University of Wolverhampton, UK Universidad Politcnica de Valencia, Spain Delft University of Technology, The Netherlands University of Pretoria, South Africa Deakin University, Australia University of Glamorgan, UK London South Bank University, UK RMIT, Australia University of Northumbria, UK University of Cape Town, South Africa Georgia Institute of Technology, USA University of Hong Kong, Hong Kong Nottingham Trent University, UK University of Glamorgan, UK Coventry University, UK Pontificia Universidad Catlica de Chile, Chile Nelson Mandela Metropolitan University, South Africa University of Greenwich, UK Nelson Mandela Metropolitan University, South Africa MUJV Ltd. UK Auburn University, USA Leeds Metropolitan University, UK University College London, UK Queens University Belfast, UK University of Wolverhampton, UK Arizona State University, USA Oxford Brookes University, UK Heriot-Watt University, UK Liverpool John Moores University, UK Northumbria University, UK University of the Free State, South Africa University of the Witwatersrand, South Africa Waterford Institute of Technology, Ireland Deakin University, Australia University of Glamorgan, UK

Bimbo Windapo Francis Wong Ing Liang Wong Andrew Wright Peter Wyatt Junli Yang Wan Zahari Wan Yusoff George Zillante Benita Zulch Sam Zulu

University of Cape Town, South Africa Hong Kong Polytechnic University Glasgow Caledonian University, UK De Montfort University, UK University of Reading, UK University of Westminster, UK Universiti Tun Hussein Onn Malaysia, Malaysia University of South Australia University of the Free State, South Africa Leeds Metropolitan University, UK

In addition to this, the following specialist panel of peer-review experts assessed papers for the COBRA session arranged by CIB W113 John Adriaanse Julie Adshead Alison Ahearn Rachelle Alterman Deniz Artan Ilter Jane Ball Luke Bennett Michael Brand Penny Brooker Alice Christudason Paul Chynoweth Sai On Cheung Julie Cross Melissa Daigneault Steve Donohoe Ari Ekroos Tilak Ginige Martin Green David Greenwood Asanga Gunawansa Jan-Bertram Hillig Rob Home Peter Kennedy Anthony Lavers Wayne Lord Sarah Lupton Tim McLernon Frits Meijer Jim Mason Brodie McAdam Tinus Maritz London South Bank University, UK University of Salford, UK Imperial College London, UK Technion, Israel Istanbul Technical University, Turkey University of Sheffield, UK Sheffield Hallam University, UK University of New South Wales, Australia University of Wolverhampton, UK National University of Singapore University of Salford, UK City University of Hong Kong University of Salford, UK Texas A&M University, USA University of Plymouth, UK University of Helsinki, Finland Bournemouth University, UK Leeds Metropolitan University, UK Northumbria University, UK National University of Singapore University of Reading, UK Anglia Ruskin University, UK Glasgow Caledonian University, UK Keating Chambers, UK Loughborough University, UK Cardiff University University of Ulster, UK TU Delft, The Netherlands University of the West of England, UK University of Salford, UK University of Pretoria, South Africa

Francis Moor Issaka Ndekugri John Pointing Razani Abdul Rahim Linda Thomas-Mobley Paul Tracey Yvonne Scannell Cathy Sherry Julian Sidoli del Ceno Keren Tweeddale Henk Visscher Peter Ward

University of Salford, UK University of Wolverhampton, UK Kingston University, UK Universiti Technologi, Malaysia Georgia Tech, USA University of Salford, UK Trinity College Dublin, Ireland University of New South Wales, Australia Birmingham City University, UK London South Bank University, UK TU Delft, The Netherlands University of Newcastle, Australia

Dispute Resolution alternatives: Problems, Preference and Process

Carl van Zyl1, Prof Basie Verster1, Stephan Ramabodu1
1

Department of Quantity Surveying and Construction Management University of the Free State, Bloemfontein, South Africa

Email: vZylCH@ufs.ac.za; VersterJ@ufs.ac.za; RamaboduMS@ufs.ac.za Abstract: Purpose of the paper: This paper serves to identify some professionals opinions of various dispute resolution methods, the problems related to project communication which may cause differences and disputes in respect of construction projects and suggested processes.

Methodology/Approach: Two studies were conducted. A case study (Study 1) was undertaken with 10 construction professionals who worked on a large shopping centre development project, which experienced problems with communication and disputes. This study enabled the identification of communication problems that may lead to disputes in answering problems, preference and process questions.

Study 2 was a follow-up to previous studies. Part of this study was also conducted to further test opinions regarding dispute resolution processes and preferences as well as the reasons for selecting Alternate Dispute Resolution (ADR) methods. A captured respondent group of 26 quantity surveyors were requested to respond. The response rate was 100%.

These studies enabled the researchers to identify communication problems, preferences as well as methods and procedures that may assist project teams in resolving disputes in an amicable manner. Various dispute resolution methods were analysed and reviewed to

determine problems, processes and preferences related to dispute generating issues and Alternative Dispute Resolution methods.

Results: Results enabled the researchers to identify an approach to the methods that may be used to influence effective dispute resolution between clients and contractors. The studies also identified communication problems and elements of good dispute resolution processes and strategies. Structured communication management and continuing interaction are basic elements to avoid disputes; however, the implementation of a tested dispute resolution method and process is important.

Value:

The results of this study may assist professionals and contractors by enabling them

to identify problems and to select the most appropriate processes and forms of dispute resolution methods. These processes or forms of dispute resolution methods should be agreed upon in cases where differences and disputes arise and where the settlement of these disputes has to be anticipated.

Key words: Claims, Communication, Construction Industry, Disputes, Professions.

Introduction

The beloved South African attorney, politician and writer, C.J. Langenhoven, quipped a century ago Litigate for a jacket, but keep the trousers ready for the legal costs, admitting then that the litigation route is a costly process and should be avoided if possible (Translation from Scanell, 1993:49).

It is proposed that a closer look at Alternative Dispute Resolution methods (ADR) should be considered. They are less adversarial, time consuming and costly, and may become more valuable (Finsen, 2005:221-222).

The objectives of this study are to firstly identify some dispute resolution problems and then to analyse ADR methods in use and investigate the preferences in order to understand which processes and methods may be used to resolve construction disputes.

The goals of claims and dispute resolution

The goals of claims and dispute resolution are firstly to establish the right of any party to submit a claim, and secondly to enable the other party to consider the claim in terms of its validity, contractual terms and possible outcome (Verster, 2006; Chappell, Powell-Smith & Sims, 2005:3).

Lodging or considering a claim does not mean that a dispute exists, but should the rejection of a claim occur, or agreement not be reached, or a different interpretation of a claim or opinion exist, one has to realise that a dispute may then be lodged. Dispute resolution should then assist the parties in resolving such an impasse in a cost effective, satisfactory and timeous manner (Verster, 2006).

An alternative dispute resolution method, like mediation was developed for various reasons, but mostly because the traditional processes, for instance litigation, were seen to be less favourable for the following reasons: Cost Attorneys, senior council and expert witnesses, all contribute to heavy costs being incurred by both parties; Time long waiting time for court dates where cases were often postponed for on-site visits, calling for expert witnesses, etc.; Most magistrates or judges are not specialists in the field of construction; and The outcomes often cause more damage. (Finsen, 2005:221-222; McKenzie & McKenzie, 2009:251-254; Mackie, 1991:66).

The processes: Alternate Dispute Resolution Methods

The following are some of the ADR methods used in the construction industry, all having the common goal to resolve disputes voluntarily and initiated by the parties themselves: Agent resolution; Informal discussion; Negotiation; Mediation; Conciliation; The mini trial; Engineering expert assessment; Adjudication; Dispute Review Board;

Partnering; and Dispute Resolution Advisor System (Tiruneh, Verster & Kotz, 2007; Verster, Ramabodu & Van Zyl, 2010).

3.1 Choice of ADR Methods For the purpose of this paper, the following five methods were investigated: Agent resolution; Adjudication; Conciliation; Mediation; and Arbitration.

The various ADR methods are briefly discussed to show the background of the elements and methods covered by the surveys and what was understood by each method under consideration.

3.2 Agent Resolution (expert resolution)

Traditionally, in the South African context, agent resolution (usually the architect) was the first stage towards resolving differences and disputes. The resolution by this agent was final and binding unless disputed within an agreed period (Quail, 1978:11-12, 166; Finsen, 2005:32-33). In terms of the Joint Building Contracts Committee (JBCC) (2004:30), the principle agent shall give a decision, on request by the contractor, should there be any disagreement between the parties. Such a decision shall be final and binding unless timeously disputed. This clause has however been removed in the latest editions of JBCC Series 2000 (JBCC, 2007:30)

3.3 Adjudication
Adjudication is an accelerated form of dispute resolution in which a neutral, impartial and independent third party deals with the dispute as an expert and not as an arbitrator, and whose determination is binding unless and until invalidated or overturned by an arbitration award (Hibberd & Newman, 2001). The adjudicator shall not advise the parties or their representatives regarding any aspect of the agreement in respect of which he has been appointed other than in accordance with stated rules (JBCC, 2005: cl. 1-7)

The adjudicators written determination of the dispute shall: be delivered to the parties, and outline reasons for his decisions (JBCC, 2005, cl. 6 -7). The decision is final and binding until and unless reversed by an arbitrator (JBCC, 2007:30)

3.4 Conciliation
Conciliation involves a process of bringing disputing parties together in a forum to investigate the problem and assist the parties to formulate their own solutions; the conciliators may also be requested to formulate their own opinion. The parties decide who the conciliator will be. The conciliator should, however, be a person with good communication skills and relevant knowledge (Loots, 1991:8-13).

3.5 Mediation
Mediation means different things to different people, but in the construction industry, it usually denotes a procedure in which a neutral third party seeks to resolve a dispute between contracting parties through mutual agreement, by conducting an enquiry, similar to arbitration, but less formal and by giving a non-binding opinion. The parties represent themselves without calling in legal professionals. The mediator should know the details of the dispute and should give each party the opportunity to state their case. The mediator should decide on the best procedure, based on

circumstances (Eilenberg, 2002; Finsen, 2005:230-232; Hibberd & Newman, 2001; McKenzie & McKenzie, 2009:174; Quail, 1978:11-12).

Quantity surveyors often perform mediation tasks for clients or other parties, be it informal as a quantity surveyor, or a formal mediator by appointment. However, in terms of many contracts, JBCC, the parties shall agree on the appointment of a mediator and meet with the mediator in an effort to reach a settlement. If a settlement is reached, the mediator shall record such an agreement which shall become binding on the parties on the signing thereof (JBCC, 2007:31).

3.6 Arbitration
In some countries, arbitration is a process provided for by an act of law, adopted by parties through mutual agreement, stipulating that they will submit any dispute that may arise between them to the impartial judgement of some third party of their choice and that the award by this impartial person will be final and binding. Arbitration is not a new process; in fact, it was known to the Romans, used by the Dutch and English in the days of colonial expansion and is currently widely used in the construction industry and further afield (Finsen, 1999: 203-204).

Binnington (2005:49-50) suggests approaching an arbitrator rather than a lawyer. He further mentions the importance of securing a competent arbitrator, one well acquainted with the process of arbitration.

In South Africa, arbitration is regulated by an act of parliament (South Africa 1969, Act 42). Arbitration is a more formal process than other dispute-resolution processes mentioned earlier, but arbitration has many advantages. Some of these are: Expert knowledge of a selected arbitrator; Possible savings in legal representation costs; Flexibility of the process; The decision is final and binding; Time and money are saved; and Arbitration is a private matter (Butler & Finsen, 1999; Eilenberg, 2002; Finsen, 2005:216-217; McKenzie & McKenzie, 2009:235-236).

Arbitration is sometimes also criticised as being only marginally quicker than litigation, especially where FIDIC documents are used (Binnington, 2005:49-50).

4 The studies: Problems and Preferences

Two different studies related to communication, problems and dispute resolution methods were undertaken by the University of the Free State and evaluated to identify problems related to communication and disputes and to identify construction professionals opinions of various processes and methods available to solve these problems. These studies followed previous surveys in respect of the same problems, but were also aimed at understanding the problems related to communication that lead to relationship disruptions and disputes.

4.1 Study 1: Case study related to communication problems

Study 1 was a case study conducted with 10 quantity surveyors. The case study project (shopping centre) investigated was not unique in respect of problems related to communication, communication instruments, claims and counter claims, and differences of opinion. Due to many communication problems, differences, claims and disputes related to the project, it was however seen as a good example to investigate.

The original contract was concluded between the main contractor, an international company, and a client who operates throughout South Africa. The amount involved was about ZAR500 million. This

amount was based on the provisional bills of quantities method, of which about 50% of costs were for building and structural work and 50% for specialist installations included in the contract sum as provisional sums. A project manager was appointed after the production process commenced and

communication systems were largely changed by him. Many sub- and direct contracts had to be concluded with specialists. The complexity of many contracts and changes in communication

systems added to the difficulties.

The research project aimed at analysing the opinions and perceived frustrations of the quantity surveyors who, on behalf of the client, had to develop tender and contract documents, cost reports, notifications, payment valuations and general cost and cost planning communications during the design and construction process.

The 10 quantity surveyors who were involved in the project in various capacities were interviewed, and responded to a specific questionnaire related to the main aspects that were identified as quantity surveying elements. These aspects are: communication instruments (13 questions) and the

effectiveness of these instruments (8 questions).

The responses to the questions enabled the research group to identify the most serious problems and suggested solutions. For this paper the most serious problems are identified.

Table 1 shows the identified communication instruments, related to this project, that were considered as the most serious problem areas.

Table 1: Results in respect of some identified instruments used in the case study Source: University of the Free State, 2007. (Ratings: 1= low, 3= intermediate, 5 = high) Average Result 1-5 1.6 2.1 2.4

OPINIONS ON COMMUNICATION INSTRUMENTS USED

% 34% 42% 48%

Employers instruction Packages (identification of work packages by project manager) Claims communication

The 10 respondents opinions (100% response) on the communication instruments, used during the project, were tested (on a scale of 1 = poor and 5 = excellent).

It is clear that the employers instructions and the identification of packages (tenant installations, refuse removal, shop-fronts, etc.) lead to disruption and eventual disputes linked to pricing, delays, uncertainty and frustration. Notification of claims was also, according to the survey, not managed well and timeously.

Table 2 shows the results in respect of general communication elements. It is also clear that the following communication processes performed below average in respect of expectations of quality procedures, and thus also influences effective management and claims communication.

Table 2: Results in respect of all general communication elements Source: University of the Free State, 2007. (Ratings: 1= low, 3= intermediate, 5 = high)
Average Result % 46% 48% 44% 32% 34% 44% 40%

COMMUNICATION ELEMENT STATEMENTS Drawing distribution was managed well and on time Professional team had an effective relationship within the team The Project managers communication was effective and well managed Owner/professional team relationship was managed effectively Time and programming was managed well Budget was clear and met the owners strategy Professional agents empowered to do their work well

The respondents were clear on their opinions related to the effectiveness and quality of general communication in respect of the specific project and the problems identified. (Tables 1 and 2). The overall opinion was that these problems were not identified early and managed well, leading to disputes.

Clear problems were thus identified. communication disruptions are:

The elements that stand out in respect of

Site, employers and contract instructions; Identification of work packages by project managers; Drawing distribution and design availability; Professional teams relationships; Project Managers project communication; Owner / professional team relationships and empowerment;

Time and programme management was not done well; and Strategy of budget and scope management.

The current situation regarding the project is that the final account cannot be settled and many claims and resolutions are outstanding. Many claims for delays are not resolved. The above-mentioned communication disruptions and problems influenced communications negatively. A clear

communication strategy was absent and this contributed further towards the unacceptable state of affairs. These results show not only the importance and need for a structured communication process to avoid disputes, but also a model to deal with disputes once disputes are evident. This model should enable stakeholders to identify problem areas early, manage these problems through a tested process and taking the preference of the parties into account.

4.3

Study 2: Quantity Surveyors and ADR reference

Study 2, conducted among 26 quantity surveyors, aimed at establishing the preference rating of various dispute resolution methods (processes), their opinions in respect of the reason why a specific method is selected, and the success rate of the methods actually used. All responded, reflecting a 100 % response. Table 3 shows the preference rating of respondents related to the tested dispute resolution methods.
Table 3: Preferred dispute resolution methods (1 = Not preferred, 5 = most preferable)

Preferred dispute resolution methods Resolution by Principal agent Conciliation Mediation Adjudication Arbitration

Litigation

Quantity Surveyors average 4.39 3.88 3.86 3.82 3.10 2.00

Previous study (2006) 4.3 3.4 4.0 3.2 3.0 -

The responses indicate that the processes allowing for communication and early solutions are preferred, and that it should be done by people who are closely linked to the project. Resolution in terms of negotiations by Quantity Surveyor / Principal Agent, are seen as the most preferred method. This study is fairly consistent with previous studies, although previously mediation was ranked higher and also received a better average score.

4.4 Study 2: Reasons for selecting an ADR method

This study was also conducted to show the reasons why an ADR method was selected. The reason for this study was also to identify the reasons linked to the preference of methods and by doing so, to enable parties to select the best claims and dispute resolution communication procedure.

Table 4 shows the reasons for choosing a specific ADR method

Table 4: Reasons why method is preferred: percentage average allocated

Reasons Control Cost effective Time effective Consensus Satisfactory end result Continuity Confidentiality

Percentage 86% 85% 84% 84% 82% 82% 82%

Percentages allocated to the reasons why a specific ADR method should be used are important and consistent. Although control and cost effectiveness received the highest percentage from the

respondents, the results show little difference of opinion, and all the reasons should be seen as important, leaving the selection of a most beneficial method to the parties concerned.

5 Findings
The results show the importance of quality and effective communication instruments, and also that these should be well managed to avoid communication problems, disruptions and disputes. The most serious problems in respect of communication that may lead to disputes were identified. In the study the following problems were seen as very serious. Employers instructions; Employer/professional team relationship; Mismanagement of time and programming; and Professional agents non-empowerment.

It is evident from this study that the professionals prefer the following ADR methods. The studies related to preferences show a consistent result. Agent resolution/negotiation type of process; Conciliation; Mediation; and Adjudication.

The above- mentioned results suggest that dispute resolution methods and the selection of a method could possibly address the above-mentioned reasons why some ADR methods are preferred, or at least a combination of the reasons, to ensure the risk and interests of the parties are taken into account and managed well. Resolution methods that do not address these issues should be avoided.

6 Conclusion
The studies had the objective of identifying the most serious problems related to communications that may lead to disputes and the extent to which various dispute resolution methods are preferred and used in South Africa, as well as the perceived reasons why an ADR method should be used. According to the majority of the respondents, ADR methods are preferred to traditional litigation to solve disputes. Of the various types of ADR methods that respondents were involved in, mediation, negotiation type methods and expert (agent) resolution stood out as the most preferred methods. Respondents also identified the reasons why they prefer ADR to traditional methods. The selection was mostly motivated by control by the parties and time- and cost-effectiveness. The case study showed that bad communication and communication instruments may lead to disruption and disputes. The management of communication is therefore fundamental to avoiding disputes.

7. Recommendations
7.1 Problems
Important problems were identified and it is thus recommended that the possible occurrence of these problem areas should receive special attention. This will lead to better communication, less

disruption, lower costs and a decline in the number of disputes. A dispute resolution with strong supporting communication enhancing procedure is recommended.

7.2 Preferences
If the strong preferences for specific ADR methods are considered, it is clear that these methods should form part of the contractual and communication arrangements. It is thus specifically recommended that contracts should include clauses that allow continuous communication to avoid disputes and include methods that will enhance the settlement of differences rather than an early formalised dispute resolution process in a court-type situation.

7.3 Processes The reasons why a specific ADR method is selected should be considered to lead parties to a contract to design a communication, claims and dispute resolution procedure that best suit their needs and that will be effectively communicated and managed by their professional teams.
The following organogram (Figure 1) reflects a provisional proposed model that shows the relationship and link between the three Ps; namely problems, preferences and processes.
DISPUTES AND CLAIMS AVOIDANCE

PROBLEM MANAGEMENT INSTRUCTIONS WORK PACKAGES DRAWING & DESIGN RELATIONSHIPS COMMUNICATION EMPOWERMENT TIME MANAGEMENT BUDGET

PROCESSES: COMMUNICATION AND SELECTION

PREFERENCES: CLIENT & PARTIES AGENT RESOLUTION MEDIATION CONCILIATION

AGENT RESOLUTION ADJUDICATION CONCILIATION MEDIATION ARBRITATION

CONSIDER THE MOST PREFERRED REASON (COST, ETC.)

Figure 1: Proposed Model

The aim of the proposed model is to assist parties to a contract to seek a procedure that best suit their needs, but that will also take the problems that may become evident during the construction process, based on past experience, into account and to select the best ADR method applicable to them.

An approach to enhance communication and a management and contractual system that identifies problems early and that helps with the selection of an applicable process based on business principles preferred by the parties is thus proposed. The above-mentioned model therefore shows a

recommendation in respect of these considerations.

8 References
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