How to Resolve a Construction Dispute Before It Becomes a Lawsuit?

The construction projects are always multifaceted operations with numerous stakeholders involved, a lot of financial investment poured into it, and the deadlines coming very close to each other.

There are too many moving wheels, conflicts are nearly unavoidable, be it contractors, subcontractors, property owners, suppliers, or architects. But an all-out lawsuit is not the initial (or even the last) resort in handling the problem.

Following are some of the major tips in settling a construction dispute before it gets too late and that too, in the cost digging litigation.

1. Check the Contract Carefully

The contract can be the first-and alternatively the most potent-means of settling construction disputes. Typical features of well drafted construction contracts are:

Well defined scopes of work
Payment schedules
Change order practices
Mediation, arbitration and other dispute resolution clauses.

In this case, it is recommended to consider the terms which you agree in detail before any formal action is taken. In most of them, the contract itself will provide the steps that should be taken before a lawsuit is even possible to be brought against the other party.

2. Communicate Early and Clearly

Most conflicts ensue due to mere communication breakdowns or misunderstanding. Even a positive aggressive determination in the communication process can aid in the de-escalation of the situation:

Solve problems even when they arise.

Communication should be professional and well-documented.

Do not use accusatory words; rather put emphasis on how to issue will be solved together.

In other situations, verbal (or written) discussion of objections may be sufficient to resolve a conflict.

3. Using Informal Negotiation

Parties are to make efforts to solve the dispute by means of an informal negotiation before they introduce external assistance. It can be done at a meeting, at a job site or through a series of phone calls or emails. This is meant to seek a meeting ground and prevent escalation of the conflict.

It is possible to gain a position of advantage in such negotiations by pulling in a Specialist Commercial Lawyers Perth to give advice in the background, or even help in preparing the proposals, without making the situation a confrontation.

4. Consider Mediation

In the event that informal negotiations cannot be made successful, mediation may be an inexpensive and non-adversarial approach to settle a construction dispute. Mediation goes further and introduces a mediator who is a third party and mediates the discussion so that the parties involved can get a decision that is acceptable to both.

The advantages of mediation:

Confidential
Faster resolution
Enables parties in keeping business relations
Most construction contracts stipulate that before taking other legal recourses, a mediated approach must be taken.

5. Apply Expert Determination

Expert determination may have advantages in some construction cases, and particularly those related to technical matters or defects. This implies that a construction expert that bears no part in the construction reviews the facts and gives a binding or non-binding decision, whichever is agreed by the agreement.

This method is capable of providing expert knowledge and advice of difficult issues, without having to go to court.

6. Alternative to arbitration

Arbitration is even more formal than litigation, but usually quicker and confidential nevertheless. Most construction contracts do have arbitration clauses that mean parties have to refer disputes to an arbitrator rather than the court.

Contrary to mediation, the decision of an arbitrator is usually binding. Arbitration enables one to have greater control over the process and also makes the sensitive business matters unavailable in the public record.

7. Know When to Come to Legal Action

Although the elimination of the litigation process is preferable most of the time, it is possible that legal action is necessary under some circumstances particularly when the unwillingness of one party to negotiate in good faith is involved or when the risk of substantial financial losses is involved.

When this happens, it is advisable to consult an lawyer who is familiar with litigation procedures in the construction field so that your rights will be well defended, deadlines observed and your case well placed.

Final Thoughts

Not all construction disputes require the case to end up in court. Most of the conflicts can be managed effectively and friendly with the appropriate approach, i.e., the clear communication, documentation of the conflict, and application of the dispute resolution tools.

If you're facing a construction dispute and want to explore your options for resolution before it becomes a lawsuit, contact our legal team today. We can help you navigate your rights, evaluate your contract, and pursue the best course of action to protect your interests.