Dispute Prevention in Construction Projects: A Lawyer’s Role
Arbitration is the most common form of alternative dispute resolution in construction disputes. Typically, arbitration clauses are incorporated into construction agreements. Once signed, the parties mutually consent to an independent arbiter resolving any disputes arising from the agreement or the project itself. Arbitration has gained traction in Zambia’s construction dispute resolution. Ideally, arbitration offers a cheaper and quicker way of resolving disputes, which is appealing given that litigation can take no less than three years on average. Another advantage of arbitration is its privacy, especially in cases that involve confidential information like financial statements, bidding strategies, or business plans. Additionally, arbiters in construction disputes tend to be well-versed professionals, which provides a sense of security and ensures an expedited resolution process.
However, no form of dispute resolution is perfect. Arbitration, like any other method, has potential drawbacks that may impact the integrity of the dispute resolution process. For example, arbiters may lack expertise in rules of evidence, which are essential for ensuring justice and fairness. Moreover, arbitration can sometimes become time-consuming and costly, affecting the project’s timeline and budget. The Dubai International Airport Expansion Project, for instance, saw an arbitration process that lasted over a decade due to complex, multi-faceted claims. The prolonged arbitration resulted in substantial legal fees, delays, and potential financial losses. In certain cases, arbitration might even be worse than no resolution at all, raising the question of whether dispute prevention might be a more viable focus.
Dispute prevention is increasingly becoming a priority for modern lawyers. This approach moves away from traditional adversarial roles, encouraging lawyers to adopt proactive practices that embed dispute prevention throughout the project lifecycle. In Zambia, this aligns with the Legal Practitioners Act, which urges lawyers to explore various alternatives before resorting to court proceedings. In the context of construction projects, lawyers can undertake several activities to prevent disputes and minimize the need for arbitration.
At MC Mulenga and Company, we recognize fundamental roles for lawyers in dispute prevention within construction projects. The first step is realistic risk allocation. Lawyers should avoid a one-size-fits-all approach to construction agreements, as each project brings unique risks. Lawyers must actively engage with parties to allocate risks to those best positioned to manage, control, and insure them. The second role is ensuring clarity in the language and terms of the construction agreement, avoiding ambiguous phrasing that can lead to unnecessary arbitration or project delays over minor misinterpretations.
Lawyers should also maintain a proactive interest in the progress of the project, a practice known as monitoring contract performance. By regularly reviewing the project and assessing risks, lawyers can identify and address potential disputes early. Finally, a lawyer can act as a “relationship facilitator,” promoting a culture of cooperation, communication, and teamwork among project participants. This can include training sessions or drafting a project charter where parties formally commit to collaboration and open communication, reducing the likelihood of disputes arising.
