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Dispute Resolving Mechanism in the Construction Industry

Dispute Resolving Mechanism in the Construction Industry


The most prone industry to disputes is the construction industry. There are various small and big things upon which the disputes arise which include timelines, coordination of parties, money-related issues, ill intentions, bad communications, hurdles, non-compliance of contract, quality issues, etc. traditional litigation process under this scenario related to time constraints and all will become very time consuming and costly, thus it promotes the shareholder and the parties involving in the dispute to use the alternative dispute resolving mechanism as it is more efficient means of resolving conflicts. [1] Therefore, in recent years this industry has seen a high rise in the ADR. Consequently, the sector is increasingly realizing that the fundamental framework of legal relationships and how businesses conduct themselves with one another must be altered to stop costly and ineffective litigation.

Arbitrating Construction Disputes

Other than the ordinary processes established by law, the tribunal of Arbitration is another alternative method of resolving disputes, with the main objective of the final resolution of the matter of the controversial differences between parties with the speedy trial also considering the finance or less expensive way, and main importantly in a less formal way like traditional litigation. For decades Constructive Arbitration has been used as an alternative dispute resolution, the hearing of the arbitration typically includes the presentation of the evidence and the testimony of the parties, the parties have the option of rebutting arguments, but only the directly involved parties are allowed to attend the arbitration process. Expert testimony is widely considered and necessary in construction and the litigation industry.[2] Thus there are various advantages and disadvantages of arbitration in the construction industry. The advantages will include the expertise of the arbitrator, speed and prompt decision, cost-effectiveness, privacy maintenance, and informal forum, and can also avoid punitive damages as well when it is used appropriately. The disadvantages will include the uncertainty of the protected hearings, lack of legal safeguards, no technical ground to follow, enforcement issues, and post-arbitration court result in more time and money consumption.[3]

Future Trends and Innovations in Construction Dispute Resolution

The construction industry has seen various shifts towards technology-driven ADR processes, along with the integration of technology the use of expert determination and the role of smart contracts are all making innovation in the industry, Blockchain and smart contracts are streamlining the contractual process in the automation of dispute-resolving mechanisms. AI is also working as a helping hand in enhancing efficiency and identification of trends. These emerging trends can embrace the efficiency, transparency, and technologically driven approach to conflict management.[4] A construction firm should also consult with their lawyers to choose the best dispute resolution method, aiming for quick, efficient, and cost-effective resolution, business relationship preservation, and focus on core business. 



[1] Understanding Dispute Resolution Options in the Construction Industry,

[2] Patel1, Sujal, and Anand Patel. “DISPUTE RESOLUTION in CONSTRUCTION INDUSTRY.” JETIR1704084 Journal of Emerging Technologies and Innovative Research, vol. 4, 2017,

[3] Mix, Darrick M. "ADR in the construction industry: continuing the development of a more efficient dispute resolution mechanism." Ohio St. J. on Disp. Resol. 12 (1996): 463.

[4] “Alternative Dispute Resolution in Construction and Infrastructure Disputes.”,


  • The article describes that the construction industry increasingly relies on ADR for efficient conflict resolution, recognizing the limitations of traditional litigation
  • Arbitration stands out as a less formal, speedy option in construction disputes, offering expertise, cost-effectiveness, and privacy, though challenges like enforcement issues exist.
  • Future trends in construction dispute resolution involve technology integration, expert determination, and smart contracts, fostering efficiency and transparency.

BY : Vaishnavi Rastogi

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