Risk Management is essential to successful dispute resolution. Projects fail because they are unable to adequately manage uncertainty and expectations. Effective risk management aims to promote successful project delivery claims avoidance through the identification, assessment and response to these uncertainties.
While the overall volume of disputes remained consistent with last year’s results, the average value of disputes decreased, and the time taken to resolve these disputes rose in 2018. This suggests the industry is beginning to better understand and address the impact of human factors in disputes, and more frequently utilize early dispute resolution techniques, such as dispute avoidance.
The most important activities in helping to avoid disputes were:
The value of disputes in North America continued to drop in 2018, making it the fifth consecutive year the value of disputes dropped since a peak in 2013. However, the average time taken to resolve disputes in the region decreased slightly. This is a reversal to last year’s findings when on average the time taken to resolve disputes had increased.
Some owners in the region have been employing more proactive measures upfront on their construction projects, and many contracts now require more sophisticated project controls methods. Knowing that change orders often create delays and inefficiencies which can lead to disputes, risk identification early in the construction process has been successful for many projects in North America. The resulting risk mitigation strategies have proven to reduce the likelihood that the construction project will end in a dispute.
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