Many clients hope that they will never encounter a dispute or a claim situation when entering into construction projects. However, construction projects are long-term transactions with high levels of uncertainty and increasing complexity. 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 the conflict be it through poor communication, project changes, overruns, defects, or simply the contractors costing and management of cash flow.
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, labor, 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' cash flow.
6. GOOD PROJECT MANAGEMENT
Potential problems can be analyzed 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 and 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 assess project progress, costs, risks, and other key performance indicators and liaise 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.