Conflict avoidance on construction projects

BY: CHRIS GRAHAM
DIRECTOR
BRITISH VIRGIN ISLANDS

Many clients when entering into construction projects hope that they will never encounter a dispute or a claim situation. However, construction projects are long term transactions with high levels of uncertainty and increasing complexity and therefore it is impossible to resolve every detail and foresee every eventuality at the outset.

As a result, situations can often arise that give rise to conflict be it through poor communication, project changes, overruns, defects or simply the contractors costing and management of cashflow.

Conflict can lead to the deterioration of relationships, breakdown in trust, delays, additional costs and ultimately breaches of contract and claims for damages.

Good practice lends itself to addressing these issues early on before the dispute arises rather than simply responding to it, when the impact on the project can have a greater impact on time and cost.

The Royal Institution of Chartered Surveyors (RICS) is the world’s leading professional body for qualifications and standards in land, property, infrastructure and construction. They address these issues through a series of good practice guidance notes which can be summarised below:

1. Clear Communications

Clear and established lines of verbal and written communications between all parties involved to avoid any potential misunderstandings.

2. Regular Reporting & Proactivity

Identify the key stakeholders and their individual needs. Keep them up to date with regular reports on objectives risks, cost, progress and quality.

3. Good Record Keeping

Conflict can often be avoided by keeping proper and detailed records of agreements, instructions, variations, labour, plant, materials etc.

4. Clear Contract Documentation

Ensuring clear contract documents are selected and drafted. Conflicts can arise from ambiguities in contract documents.

5. Good Payment Practice

Establishing and adhering to proper payment practices, closely monitor and control contractors cashflow.

6. Good Project Management

Potential problems can be analysed and managed by proactively planning future work and raising issues of concern early. Closer co-operation between project stakeholders can improve teamwork.

7. Good Client Management

A proper and full understanding of the client’s brief and objectives can help avoid conflict, as can regular communications to manage their expectations.

8. Good Design Team Management

Ensuring the timely provision of comprehensive and coordinated design information within the design team and clear instructions and directives issued to the contractor.

9. Good Contractor Management

Regularly assessing project progress, costs, risks and other key performance indicators and liaising with the main contractor to deal with any problems early on.

10. Good 3rd Party Management

Identifying and assessing third party dependencies and putting in place strategies to mitigate, transfer, avoid or accept risks.