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The Construction Industry is an Industry that brings together a diverse range of groups and individuals who work together with limited resources to plan and deliver a unique product for the various project stakeholders. Due to the complexity of projects, the number of human interfaces and communication issues, the commercial risks involved and the potential for unforeseen events, difficulties, differences, disagreements or disputes are an inevitable consequence of the process.     

The Cost of Construction Disputes (Direct and Indirect) can be very substantial with the ultimate cost being as much, if not more than the actual amount in dispute.  The indirect cost can be measured in terms of in-house resources being applied to the resolution of the dispute involving management and administration at all levels together with the use of in-house legal expertise. In the larger disputes, these personnel are frequently supplemented by the use of Consultants, Independent Experts and external Construction Lawyers. In addition, there is the additional cost of an independent and impartial third party and his or her advisors together with the venue costs. These are the additional direct costs of resolving the dispute. However, there is another category of cost, the hidden cost of construction disputes, which are sometimes forgotten, such as the over-burdening of staff leading to the loss of morale, loss of productivity and quality on site and ultimately the loss of key personnel.

In addition, there may be emotional impacts, impacts upon reputations resulting in damaged relationships and lost opportunities. Diverting resources to the resolution of disputes means diverting resources from core productive business and this is not only distracting and time consuming but is usually very costly.

OCCCC advocate the use of dispute avoidance wherever possible and this comprises a two tier approach, which is as follows:-

• 1st Tier  -  Site or project level negotiation involving the team with or without OCCCC.

• 2nd Tier – Executive level negotiation involving only the top key decision makers on both sides with one Party accompanied by OCCCC.

While traditional contracting based on the Standard Forms of Contract is based on an adversarial approach, Dispute Avoidance entails compromise by both Parties in order to mitigate risk, avoid wasting valuable management time and to minimise overall cost. In OCCCC experience, it is not unusual for a Party to be a perceived winner on paper but to lose substantially and suffer co-lateral damage through an un-willingness to compromise and to incur some or all of the indirect costs noted above.

For Dispute Avoidance techniques to be successful both Parties must engage fully in the process and in a constructive manner, respect its opponent and explore realistic settlement possibilities.  Settlement negotiations are usually conducted on a ‘without prejudice’ basis.    

OCCCC Principal is expert in preparing SWOT and Risk analyses and in Negotiation and has had a very high success rate over the years in construction dispute avoidance. However, OCCCC advocate a prevention rather than a cure approach and thus, Construction Employer’s are advised to ensure that their projects are properly planned, financed and managed as a failure in any one of these areas will invariably lead to dispute.

Involving OCCCC at an early stage in a project either as a sole Dispute Avoidance Consultant or part of a Dispute Resolution Board (DAB) can have a beneficial effect and lead to time and cost savings for Employers.

Brian M. O’Connor’s is a highly experienced dispute avoidance Consultant. Mr. O’Connor’s expertise has derived from 28 years working in the Construction Industry with 15 of those years being attributed to advising Clients on all aspects of Construction with the exception of design. These Clients have included International Main Contractors and Sub-Contractors and large International Employers and Developers.

Mr. O’Connor’s pragmatic and flexible approach to the settlement of Contractual Claims has led to the avoidance of countless disputes and his experience in this field will be an asset to any potential Client.