Dispute Resolution Methods

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Peter Milne

Dispute Resolution Methods

Within the construction industry there are many occasions where a dispute can arise; from an issue over a development approval, through payment disputes and quality and defect issues, to Work Cover and compensation claims. All of these can be resolved through many different methods, these include, but are not limited to; litigation, mediation, arbitration and expert determination (both binding and non-binding). While all these options can provide a resolution, they vary in the degree of enforceability of the final resolution, and the likelihood of the relationship being maintained after the dispute is settled.

Because you will rarely get the exact same dispute more than once in the construction industry, there is a lot of opportunity for alternate dispute resolution (ADR) methods to be employed rather than the time consuming and more expensive method of litigation. Despite this, there are also a lot of times where litigation becomes the only option. When the business relationship breaks down, and there is no longer any desire for an amicable outcome, both parties merely seek what is best for their own interests. In the construction industry, there is also a large occurrence of expert determination, especially in the case of smaller businesses where the owner may not have expert experienced engineers or consultants working for them and will have to hire in an external consultant. Before any process is begun it is often advisable for the disputing parties to seek legal advice as to whether the process that they desire to undertake is actually the best for them or whether they should take a different route. This advice can often save people a great amount of money and time. As the less formal methods of dispute resolution are considerably less expensive Page

Peter Milne


and faster and will more often end with an acceptable outcome for both parties. This is because the issue is negotiated as opposed to being determined by a judge or commissioner. The ADRs can be broken up into three different categories. These are facilitative, advisory and adjudicative. The different types of ADR are used across a wide variety of cases, but some are more suited to specific claims and situations. Chart 1

(Gibson. A, Fraser. D, (ed. Fitzpatrick. S, for University of Western Sydney 2007) Business Law. Pearson Education. Australia. PP. 43)

Litigation is the process of taking your dispute through the court process. This method is almost always costly, and depending on the dispute which is raised, can be a very long

court fees as well. While the process of litigation is a binding determination, there is still the Peter Milne



process. Litigation is expensive in that it requires full representation by a lawyer and incurs

issue that in most cases, there will be no clear winner once the determination has been handed down. This is because more often than not, both parties will come out of the dispute with a lot less than they had originally hoped to gain from the process, and often will incur fees greater than the settlement they have received especially if they end up with the court fees of the other party. The process of litigation is such that almost all actions are initiated or carried out by a lawyer or legal representation. This process starts from the initial seeking of instructions about the advised method of resolution. Whether this be an ADR method, or if it is actually required that litigation be sought. Litigation is rarely preferred because of the cost and time expenses, but also because of the fact that it is rarely a very confidential process, with many different parties being drawn into the process, and the proceedings can almost always be looked into by the public after the case has been wrapped up. This means that people can take the dispute into account when they are choosing whether to use the company or not, potentially damaging a...
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