Explore all the alternatives before you head for the courts

- 08/11/2007

Construction News
Greg Brownlee

Dispute is not something that should be entered into lightly. Far better, after all, to maintain communication and steer clear of disagreements than to plunge in feet first and with all guns blazing. But if the worst cannot be avoided, then remember that resolving disputes is a specialist subject that should be undertaken with much care and consideration, and with the following pointers in mind:

Identify the issue
Firstly, make sure that both parties have identified the existence of a dispute. While you may have a legitimate claim, until the other party actually states that they disagree, there is legally no dispute to resolve.

Be ready to negotiate
Deal with disputes as soon as they arise - don’t allow the situation to reach a stalemate. If a solution can be found through negotiation it will save time and expense. Always set yourself a strict timeframe for negotiations.

Does it make financial sense
Irrespective of the strength of the claim - weigh up the value of the dispute against the risk of losing or the cost of winning - will you for example lose a customer? Incurring a loss by refusing to enter into a dispute is often the better option. Costs can easily become much higher than the amount in dispute.

Get an unbiased opinion
Seek third party advice before getting immersed in a dispute. A third party can offer advantages such as clarity, neutrality and objectivity and may well propose a solution that you have overlooked.

Check your contract
If you have exhausted all possibilities of reconciliation, use your contract as a guide, as this should outline how to go about settling a dispute. Failure to have a contract in place could seriously limit your choice of dispute resolution procedure.

Get expert help
Only ever deal with a dispute yourself if you have the necessary expertise and time, and if the process allows for it. If you do decide to go it alone, minor value disputes are best handled through adjudication or the small claims court. Remember, if the dispute does not involve a point of law, don’t use a lawyer until you have to.

Examine your options
Many contractors feel that the final process to dispute resolution is adjudication, however, it is not the most economic method - adjudicators' costs are not recoverable. If the dispute is complex you may want to use the courts, or if privacy is needed, arbitration. This ensures a proportion of your costs will be recoverable if you win.

Whichever process you choose, keep communication open and remain clear and focused on the end objective of maintaining relationships and contracts. In an ideal world however, dispute resolution should not be entered into in the first place. Careful contract management and planning from the outset are key to ensuring that both parties work together harmoniously.

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