Resolving Disputes

Despite efforts to minimise risk and avoid escalating tensions, full-scale disputes do frequently occur in construction projects.

Our study shows that arbitration continues to grow in popularity as the preferred method of dispute resolution in the industry. 52% of respondents identified arbitration as their chosen form of resolving disputes, an increase on 47% in 2021. 

The top arbitral institutions are credited with making arbitration more appealing again to disputants and the number of new case filings to major institutions has risen substantially over the last decade. 

Seemingly, mediation is losing its attractiveness with only 37% singling out mediation or another form of ADR to resolve disputes, a significant drop from 55% in 2021. Moreover, litigation in national courts appears to have been pushed further to the margins. Only 3% have a preference for litigation in 2022, this dropping from 5% in 2021. 

While the data indicates that mediation and other forms of ADR might be losing their allure, our further research suggests that mediation is still viewed as complementary to the overall dispute resolution process. Construction industry professionals appreciate the confidential nature of arbitration and the fact that disputants have some control over the appointment of arbitrators and the timetable, but it is still viewed as expensive and drawn-out. Mediation, however, gives the disputants a chance to resolve cases, before having to commit time and resources to high-cost arbitration or litigation proceedings.

Fritha Wheeler-Ozanne says that mediation often delivers a favourable resolution, even where the parties are pessimistic of achieving an agreement. She also believes it can be especially effective when there are more than two parties involved:  “Getting everyone in the same room and cutting through some of the technical issues or finding a way to navigate through different expert opinions, it's been really effective with a mediator.”