Best practice in construction disputes : avoidance, management and resolution

722 Pages·2013·6.915 MB·English

by  Paula Gerber

Best Practice in Construction
Disputes: Avoidance,
Management and Resolution
Dr Paula Gerber
LLB (QUT), MSC (Distinction) (King’s College, London),
LLM (Mon), PhD (Melb)
Associate Professor, Law School, Monash University
Admitted as a Legal Practitioner in Queensland,
New South Wales and Victoria, as a solicitor in England and Wales
and as an attorney in California.
Brennan Ong
LLB, BCom (Mon)
Research Assistant and PhD Candidate, Law School,
Monash University
Admitted as a Legal Practitioner in Victoria.
LexisNexis Butterworths
Australia
2013
LexisNexis
AUSTRALIA LexisNexis Butterworths
475–495 Victoria Avenue, Chatswood NSW
2067
On the internet at: www.lexisnexis.com.au
ARGENTINA LexisNexis Argentina, BUENOS AIRES
AUSTRIA LexisNexis Verlag ARD Orac GmbH & Co
KG, VIENNA
BRAZIL LexisNexis Latin America, SAO PAULO
CANADA LexisNexis Canada, Markham, ONTARIO
CHILE LexisNexis Chile, SANTIAGO
CHINA LexisNexis China, BEIJING, SHANGHAI
CZECH REPUBLIC Nakladatelství Orac sro, PRAGUE
FRANCE LexisNexis SA, PARIS
GERMANY LexisNexis Germany, FRANKFURT
HONG KONG LexisNexis Hong Kong, HONG KONG
HUNGARY HVG-Orac, BUDAPEST
INDIA LexisNexis, NEW DELHI
ITALY Dott A Giuffrè Editore SpA, MILAN
JAPAN LexisNexis Japan KK, TOKYO
KOREA LexisNexis, SEOUL
MALAYSIA LexisNexis Malaysia Sdn Bhd, PETALING JAYA,
SELANGOR
NEW ZEALAND LexisNexis, WELLINGTON
POLAND Wydawnictwo Prawnicze LexisNexis,
WARSAW
SINGAPORE LexisNexis, SINGAPORE
SOUTH AFRICA LexisNexis Butterworths, DURBAN
SWITZERLAND Staempfli Verlag AG, BERNE
TAIWAN LexisNexis, TAIWAN
UNITED KINGDOM LexisNexis UK, LONDON, EDINBURGH
USA LexisNexis Group, New York, NEW YORK
LexisNexis, Miamisburg, OHIO
National Library of Australia Cataloguing-in-Publication entry
Author: Gerber, Paula.
Title: Best practice in construction disputes:
avoidance, management and resolution.
Edition: 1st ed.
ISBN: 9780409333077 (pbk).
9780409333084 (ebk).
Notes: Includes index.
Subjects: Dispute resolution (Law) — Australia.
Other Authors/Contributors: Ong, Brennan.
Dewey Number: 347.9409.
© 2013 Reed International Books Australia Pty Limited trading as LexisNexis.
This book is copyright. Except as permitted under the Copyright Act 1968 (Cth),
no part of this publication may be reproduced by any process, electronic or
otherwise, without the specific written permission of the copyright owner.
Neither may information be stored electronically in any form whatsoever
without such permission.
Inquiries should be addressed to the publishers.
Typeset in HelveticaNeue and Bembo.
Printed in China.
Visit LexisNexis Butterworths at www.lexisnexis.com.au
Foreword
It is a privilege to write a foreword to this important work: Best Practice in
Construction Disputes: Avoidance, Management and Resolution. Ranging over its 19
chapters, Dr Paula Gerber and Brennan Ong comprehensively analyse the issues in
this critical area. They do so in a penetrating and lucid style, supported and
animated by a depth of scholarly research which is unparalleled in the field.
This book is the first to take a holistic approach to the role of construction
lawyers and industry professionals in the avoidance, management and resolution of
conflicts which arise in this battle-scarred field of endeavour. Indeed, after
considering the concepts described in this work, it is hard to avoid the conclusion
that both construction and legal professionals have a duty to actively promote the
implementation of the dispute avoidance, management and resolution
methodologies described in this book. The Dalai Lama gives moral force to this
suggested duty in the quotation selected by the authors which they include in
Chapter 1:
As long as human beings have a conscience and intellect to think about the future, definitely there will
be conflicts. Conflicts are made by human beings and methods to solve them must be created through
human intelligence. It is wise to solve the conflicts through dialogue, not through weapons.
While standard texts in construction law may devote one, or perhaps two,
chapters to disputes, to the extent that they do address the issue, the focus tends to
be on dispute resolution through alternative/appropriate dispute resolution
processes (ADR), arbitration and litigation. What is all too often ignored is the
emergent trend towards dispute avoidance and dispute management.
This gap is admirably filled by this work. It provides perhaps the first in-depth
and scholarly analysis ever devoted to the life cycle of construction disputes,
covering both theoretical and practical aspects. The authors catalogue, describe
and analyse best practice in the avoidance and management of disputes, including
the very latest techniques, set alongside and compared with the more traditional
methods of dispute resolution, such as the various ADR methods, and the
processes of adjudication, arbitration and litigation. They achieve this in a manner
which has never before been attempted.
The book is nothing less than cutting-edge in its approach. A good example is
provided in Chapter 4 which describes Dispute Avoidance Processes (DAPs).
These are described by the authors as involving a relatively recent innovation:
… designed to change the culture on construction projects from one that facilitates and fosters disputes
to one that enables the proactive prevention of disputes, and the ‘real time’ resolution of those disputes
that the parties have not been able to successfully avoid. DAPs enable parties to respond to problems
with sustained thinking rather than finger pointing, thus facilitating resolution rather than escalation of
conflicts.
The authors astutely liken this groundbreaking process in the construction
industry to the holistic approach adopted by the medical profession to developing
strategies for preventive medicine.
The importance of approaches such as these cannot be overstated. As Gerber
and Ong observe in Chapter 1, it has been estimated that the direct costs of
resolving construction disputes in Australia amount to between AUD$560–840
million per year, and when added to the avoidable costs of disputes (such as delay
and opportunity costs), total waste exceeds AUD$7 billion annually. A similar level
of wastage has been reported in both the United Kingdom and the United States.
To these ‘hard dollar costs’ must be added other incalculable costs such as strained
commercial relationships, and the drain of time, energy and resources away from
other potentially profitable ventures.
The practical utility of the work springs from the page. This is no treatise in
experimental dispute management theory. Guidance is given throughout on
implementation of the principles in practice, ranging from observations on
inappropriate pleadings in litigation (Chapter 18), to contact points for the two
Australian organisations dedicated to promoting the use of Dispute Resolution
Boards (DRBs). The authors point out that despite a slow start in Australia, a
number of construction projects are now successfully using DRBs, underscoring a
growing recognition of the practical value of dispute avoidance mechanisms.
The techniques for the management and resolution of construction disputes,
which are examined in this work, have application throughout the world. This
book will continue to provide insights of great value and set the benchmarks for
contemporary reform and further development in this field for many years to
come.
Paula Gerber and Brennan Ong are to be congratulated for their foresight in
conceiving of the concepts behind this reference work, and for their tenacity and
skill in bringing alive and imprinting on paper their ideas and strategies for the
avoidance, management and resolution of construction disputes for the practical
use, stimulation and enjoyment of us all.
Justice Peter Vickery
Judge-in-Charge, Technology, Engineering and Construction List,
Supreme Court of Victoria.
13 March 2013
Preface
This book emerged from our commitment to the construction industry and our
deep-seeded belief that the adversarial culture which plagues many projects
significantly reduces the prospect of a job being finished on time, within budget
and with no disputes. We are convinced that there is a better way of managing
construction contracts and projects so as to facilitate the efficient management of
conflicts and reduce the risk of disputes. We hope this book can play a modest
role in helping to bring about the change that is necessary if the construction
industry is to achieve greater productivity, profitability and prosperity.
We would like to thank the wonderful team that greatly assisted us with this
book. A number of research assistants provided invaluable help, namely, Natasha
Burns, Jacqueline Chan, Tom Denehy, Daniel Nguyen and Diana Serra. Their
hard work was instrumental in completing this contemporary analysis of best
practice in the avoidance, management and resolution of construction disputes.
We would like to particularly thank Dr Paul Gerber for his careful proof
reading of the manuscript. He provided much inspiration and guidance, but sadly
passed away before this book was published.
This tome was produced within the Monash University Law School, which
provided the intellectual environment, funding and support that ensured its
successful completion.
The LexisNexis Butterworths team provided valuable professional support and
guidance, particularly the wonderful Catherine Britton and Hayley Moore. Their
expertise and patience was much appreciated.
Justice Peter Vickery, Judge in Charge of the Technology, Construction and
Engineering List of the Supreme Court of Victoria has always been a great
advocate of construction law scholarship and a wonderful mentor to aspiring
construction lawyers. His Foreword to this book reflects his commitment to the
discipline of construction law and those working in this vibrant field.
Finally, we would like to acknowledge our families, Vanessa, Benjamin and
Jasmin, and Lauren, Alex, Ethan and Oliver. We are grateful for the space they
gave us to work on this labour of love. Without their devotion, good humour and
encouragement this book would never have seen the light of day.
Paula Gerber
Brennan Ong
August 2013