Good Example Of Types Of Alternative Dispute Resolution Literature Review

Abstract

The construction process is a complex process with many variables and expectations and these contribute to a high number of disputes within the construction process. Alternative dispute resolution is one of the means used to solve the disputes that may arise in the construction process. In this paper, alternative dispute resolution as a way of solving disputes in the construction process is discussed. The term alternative dispute resolution is defined from various contexts. The paper then outlines the history of alternative dispute resolution with emphasis on the development and assimilation of alternative dispute resolution in the construction industry with time. The various types of alternative dispute resolution techniques are also discussed. Finally, the paper discusses the effectiveness of alternative dispute resolution techniques by showing the advantages of using the.
Keywords: Dispute resolutions, negotiation, mediation, arbitration, construction projects,

Introduction

Disputes are a common face in the construction industry just as in other industries. In the present day, the advances in technology and the access to information has helped to take the construction industry to the next level. There are construction designs of increasing complexity. In addition to this, the diversity of the designs across different projects has increased by a great magnitude. Due to these numerous variables, many people are involved in the construction process. Proper communication channels and adequate and exhaustive planning since the beginning of a construction project are essential to minimize the emergence of disputes later in the project. However, even with these in place, unprecedented future developments that may not be in good taste with one of the parties to the construction project may create a dispute. All these variables lead to the rise of different types of disputes in the construction industry.
When disputes arise, there is a myriad of avenues, which can be used to arrive at a consensus and solve the dispute. Most people decide to solve their disputes through a court process. The United States of America legal system provides a framework for solving are disputes that cannot be resolved within the internal structure of the organization to be adjudicated and resolved in the court. In most cases, this is not desirable as it is costly to all aspects to the parties involved. Therefore, there is need for alternative ways to solve these disputes that does not involve the court. The Cornell University law school website gives the definition of alternative dispute resolution, as any means of solving a dispute that does not involve the litigation process. This is the simplest definition of alternative dispute resolution. According to this definition, any means of arriving to the solution of a dispute that does not involve litigation qualifies as alternative dispute resolution.

Background history

The history of alternative dispute resolution dates back to the ancient times. In 1800 BC, arbitration and mediation were used as means of resolving disputes between the Mari kingdom and its neighboring kingdoms. Since then, alternative dispute resolution has been used to solve a myriad of disputes. According to the alternative dispute resolution timeline compiled by Jerome T Barret and Joseph P. Barret of The Association of Dispute Resolution, the first statute of alternative dispute resolution was drafted and passed in 1888 in the United States of America. This statute was the arbitration act and it was mainly formulated to provide an infrastructure to resolve disputes among the workers participating in railway construction. The year 1926 saw a new dawn in the use o alternative dispute resolution in the United States. During this year, the American Arbitration Association was created.
In the year 1970, the United States of America was enjoined in the United Nations awards for the countries on the forefront in recognizing and advocating for alternative dispute resolution. The timeline also details another important step in the assimilation of alternative dispute resolution to be in 1983 when the first academic program training the learners in alternative dispute resolution was started in the Harvard University.
In the year 1989, there was a meeting of the American bar association. This meeting was held in Honolulu and it formed one of the landmarks in the inception of the use of alternative means of dispute resolution. In the years preceding this meeting, there was an increase in the disputes solved using alternative dispute resolution. In his article titled “Resolving construction disputes – the alternative dispute resolution process,” Glenn A. Urquhart observes that in the present day, there are almost no litigations involving the construction industry in the District of Columbia in the United States of America. Alternative dispute resolution was seen as a means of improving the court process by clearing the backlog of industrial and construction litigations. This is because, the settlement of the disputes out of the court meant that the court did not get involved in the first place.
Since the 1989 meeting, more legislation has been passed at the state and the federal level with respect to alternative dispute resolution. There is a consensus of principle across all these legislations. The spirit of these legislations is to use all means possible to solve industrial and construction disputes out of the court. Many agencies among them the American Arbitration Association have been created to facilitate the processes of alternative dispute resolution. In addition, more institutions have come up with academic programs tailored to infuse the learners with skills in alternative dispute resolution.

There is a myriad of techniques that are use to amicably reach to a resolution without involving the court system. The nature the different types of alternative dispute resolution is varied across the board. The parties choose the method best preferred depending on the nature of the dispute and the willingness to resolve the dispute. In the construction industry, the alternative dispute resolution efforts include pre-emptive measures known as pre-dispute measures and post-dispute measures. The pre-dispute measures are measures directed towards the prevention of any dispute arising. This means of resolving a dispute is known as the referee method. This is done by involving the parties in a construction process in designing the resolutions to probable disputes in the project even before the project starts.
This measure is an important step in alternative dispute resolution because it helps both parties to have a reference point from which the digression from the clauses agreed upon can be observed and the steps prescribed taken. Therefore, the two parties already have an internal framework from which any expected dispute can be resolved. The referee method involves the use of a third party that both parties have agreed upon. The third party is supposed to come in incase the dispute cannot be resolved using negotiations between the disputing parties. In some cases, it is desirable for the court to select a referee for the parties to a construction project to guarantee a dispute resolution process devoid of bias. The success of this type of dispute resolution is enhanced if there are clauses under which the referee is to base his or her resolutions.
Even with the drafting of dispute resolution clauses before the beginning of the construction process, disputes still arise in construction. The source of these disputes may be unprecedented changes in the course of the construction. The clauses may not have provisions for some types of the disputes. In addition, wrongful interpretation of the clauses may not go well with the other party in the construction process leading to disputes, which cannot be resolved under the framework provided by the premeditated dispute resolution measures. At this stage, the parties can still resolve their disputes without necessarily having to go to the court. This is made possible using the post-dispute alternative dispute resolution measures.
The main types of alternative dispute resolution can be grouped into three major groups. These are negotiation, mediation and arbitration. In the United States of America, the American Arbitration Association facilitates most of the alternative dispute resolution activities. The association is composed of experts in the legal field and in the construction industry who help the disputing parties to arrive at a resolution that is mindful and fair to the two parties involved. It is important to note that alternative dispute resolution can only be successful if the parties involved are open and willing to be subjected to the alternative dispute resolution process.

Negotiation

Negotiation is one of the most used means of alternative dispute resolution in the construction process. Negotiations are favorable especially in cases where the magnitude of digression from the conditions agreed by the parties in the beginning of the project is not large. According to Matthew Patrick Tucker in the publication “An overview of Alternate dispute resolution use in the construction industry,” negotiation refers to the direct discussions between the disputing parties in the construction dispute without the involvement of a third party. Lewicki, R., Saunders, D., Minton J. and Barry B. defines negotiation as a dispute resolution process that involves the parties to a dispute deliberating on the issue and working towards an agreement.
The proceedings of the negotiation process do not form the agreement but they help the disputing parties to lay down their concerns and make them known to the other party. This type of alternative dispute resolution is viewed as old fashioned due to the likelihood of the agreement being violated in the future. This happens in most cases due to the lack of a neutral third party to oversee the proceedings and to hold the parties to the dispute to account. This is the greatest weakness of the negotiation technique.
The product of a negotiation process is an agreement. This might be oral or written. Written agreements are more binding than the oral agreements since the oral agreements can easily be dismissed as exaggerated or hearsay. The agreement from a negotiation process is that which both parties do consensually arrive at. However, for the agreement to be valid, it must be in accordance to the law and should not be in violation of any laws of the land.

Mediation

Mediation is another popular alternative dispute resolution means. Meditation is defined as the process through which disputing parties reach to an agreement through deliberations facilitated by a third party known as the mediator. The drservices.org website defines mediation as the process through which a dispute is resolved through the pure effort of the disputing parties .across the two definitions, one thing that emerges is that Unlike the negotiation method, the mediation method involves a third party. This third party is known as a mediator. Mediators are preferably people who he disputing parties agree to oversee the dispute resolution process either before the dispute arises or after the dispute. The mediator can also be a person who the court nominates to oversee the dispute resolution process.
The mediators are usually people who have been trained in dispute resolution. Different mediator approach the dispute resolution process differently depending on their personal abilities and the nature of the dispute. The mediation process usually takes the form of several gatherings during which the mediator leads the disputing parties in the construction project to mediation. The sessions involve joint meetings and private meetings. During the private meetings, the mediator divides the disputing parties into groups and moves from one group to another until an amicable solution is arrived at. In some situation, both parties cannot settle the dispute on their own. In such a case, the dispute is either taken to court for litigation or taken through an arbitration process.
Mediation has been used in the past to solve many construction disputes. One o the landmark disputes solved through mediation was during the construction o the Boston highway popularly known as the big dig. The dispute involved two parties to the construction of the highway: the contractor and the subcontractors. This dispute was mediated on location o the construction. This was a proof of the efficiency in terms of time and legal costs. The construction project was up and running within a short time due to the speed resolution of the dispute.

Arbitration

Arbitration is a means of dispute resolution that is similar to the mediation process. The UNITAR which is a united nations chapter dealing with alternative dispute resolution, arbitration is a process of alternative dispute resolution through which the disputing parties resolve their dispute by arriving at a decision made by a third party that is legally binding to both parties. This technique is used where the mediation process is unsuccessful. The third party who makes the legally binding decision for the disputing parties is known as the arbitrator. The arbitrator reviews the situation of the dispute and issues his or her decision after considering the views from both parties. The arbitrator has to be neutral in the dispute. The arbitrator is usually nominated by the court according to the HG.org website, arbitration is usually the last resort before the disputing parties submit themselves to a legal process.

Effectiveness of alternative dispute resolution

While the court is a possible dispute resolution channel, many disputing parties would rather not go through the court process. They prefer the alternative dispute resolution techniques because they have been proven effective. The benefits enjoyed by both the disputing parties and the advantages that it has over the court process are the foundation of the effectiveness of the alternative dispute resolution techniques. According to a study done by CIF in Ireland, most of the building contractors preferred using alternative dispute resolution in resolving construction disputes. Of the contractors interviewed, 52% preferred settling their disputes through the facilitation of a mediator, 45% preferred settling their disputes through negotiation and only 2% preferred the involvement of an arbitrator. Only 1% preferred using the court process to solve their disputes.
The first advantage is that alternative dispute resolution reduces the number of legal cases involving the disputes in the construction industry. Most disputes in the construction industry are resolved. There has been a stunning decrease in the number o litigations involving disputes in the construction industry in the recent past. This goes a long way in eliminating the backlog of cases in the court and hastens the court process. It has also been established that the alternative dispute resolution techniques especially where the court appoints a mediator or an arbitrator increases the customer satisfaction in the legal process.
The second advantage is that alternative dispute resolution in the construction industry is that it significantly saves time and money for the construction firms and other parties in the disputes. The civil process of resolving disputes in the construction industry is lengthy. In addition to this, it involves the use of many financial resources in legal fees and administrative costs. However, the alternative dispute resolution techniques help to resolve the disputes in a short process that saves the disputing parties’ time. It also saves the parties the time that could have been used in the litigation process. The profitability of construction firms is paramount and alternative dispute resolution facilitates financial savings, which are essential in ensuring this.
Another advantage of alternative dispute resolution is that it fosters good business relationship between the disputing parties. When the situation does not aggravate to a court process, it provides space to continue working in harmony. In an ideal alternative dispute resolution case, no party that can claim victory and in the same way, no party can be a loser. The resolution is usually in the best interest of the two parties. However, in a court process, the case may turn in the favor of one party and this ruins the relationship between the companies. Alternative dispute resolution preserves this relationship hence its effectiveness.
In addition, alternative dispute resolution is a way of preserving the privacy of the institution involved. Many alternative dispute resolution techniques are carried out in-house and they do not spill to the public domain. The law also requires that the mediators and the arbitrators used in the mediation and the arbitration processes respectively do not divulge the details of the dispute to the public without the consent of the disputing parties. This ensures that he image of the construction company is maintained. If the dispute is subjected to a court process, the proceedings are open to public scrutiny and it may release into the public, details about the construction firm, which are private. This makes alternative dispute resolution a more effective means of resolving disputes.
Finally, alternative dispute resolution creates conducive environment for investment in the construction industry. According to the United States Of America Department of Veteran Affairs, the adoption of alternative means of dispute resolution sends the right message to the investors in the industry. It creates an environment of reduced legal bottlenecks that characterize unfavorable business environment. These legal bottlenecks in turn discourage investors from venturing in the construction industry due to the fear of being subjected to a lengthy and embarrassing litigation. However, where the investors know that the industry has channels for alternative dispute resolution, they will tend to invest more.

Conclusion

In conclusion, alternative dispute resolution as a way of solving disputes in the construction industry has come a long way. Since its inception, there has been an increasing number of disputes solved using alternative dispute resolution. The effectiveness of the alternative techniques of dispute resolution has been facilitated its advantages which include reduction in costs, saving time, reduction in the number of cases before the court and the maintenance of a good relationship between the disputing parties. Alternative dispute resolution is clearly an effective technique of resolving disputes in the construction process.

References

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