Alternative Dispute Resolution Systems

ALTERNATIVE DISPUTE RESOLUTION
METHODS FOCUSING ON:

PREVENTIVE AND AMICABLE APPROACHES
A THESIS SUBMITTED TO
ADDIS ABABA UNIVERSITY
FACULITY OF TECHNOLOGY-SOUTH
DEP. OF CONSTRUCTION TECHNOLOGY AND MANEGMENT
BY- AMANUEL SOLOMON

- ASHENAFI DEGEFA
- SELAMYIHUN YIRGA
IN PARTIAL FULFILMENT OF
THE REQUIRMENT FOR THE BSc DEGREE IN
CONSTRUCTION TECHNOLOGY AND MANEGMENT
AUGUST 2006
ADDIS ABABA UNIVERSITY
FACULTY OF TECHNOLOGY- SOUTH
DEP. OF CONSTRUCTION TECHNOLOGY &MANEGMENT
TITLE: Alternate dispute resolution methods:

Preventive and Amicable Approach
BY:
• AMANUEL SOLOMON
• ASHENAFI DEGEFA
• SELAMYIHUN YIRGA
APPROVED BY BOARD OF EXAMINERS
ADVISOR: ______________ SIGN. ________ DATE _________
E XAMINER______________SIGN._________ DATE _________
i
Tables of Contents
Acknowledgement ………………………………………………………………..........
Tables of Contents………………………………………………………………………
List of Figures and Tables………………………………………...................................
Abbreviations………………………………………………………… ……………….
1. Introduction
1.1 Background …………………………………………….………………… 1

1.2 Problem statement …………………………………………………………2
1.3 Objective of the study………………………………………………………3
1.4 Thesis lay out ………………………………………………………………3
2. Research Methodology…………………………………………………………4
3. Literature Review
3.1 Construction disputes
3.1.1 Definition……………………………………………………………….6
3.1.2 Cause……………………………………………………………………7
3.1.3 Impact…………………………………………………………………..8
3.2 ADR
3.2.1 Definitions………………………………………………………………9
3.2.2 What can ADR do? …………………………………………………….10
3.2.3 Limitation ………………………………………………………………11
3.2.4 Different categories of ADR methods …………………………………12
3.2.4.1 Preventive methods……………………………………………….13
3.2.4.1.1 Risk Identification and Assessment…………………………..14
3.2.4.1.2 Partnering …………………………………………………….15
3.2.4.1.3 Dispute Review Adviser ……………………………………..19
3.2.4.2 Amicable methods
3.2.4.2.1 Negotiation…………………………………………………...20
3.2.4.2.2 Mediation/Conciliation……………………………………….23
3.2.4.3 Judgmental methods
3.2.4.3.1 Adjudication………………………………………………….26
3.2.4.3.2 Arbitration……………………………………………………26
3.2.5 Litigation ……………………………………………………………….26
3.2.6 Preventive and Amicable Vs. Arbitration and Litigation……………….26
4. Findings and Discussion

4.1 Preliminary Remarks…………………………………………………………29
4.2 Causes of Disputes ………………………………………………………….
4.2.1 Due to Delivery Systems ………………………………………………..30
4.2.2 Disputes during execution of the work ………………………………..31
4.3 Stakeholders experience of ADR methods ………………………………….32
4.4 Stakeholders awareness towards ADR ………………………………….......32
4.5 Use different DR methods …………………………………………………..
4.5.1 Preventive ……………………………………………………………….33
4.5.2 Amicable ………………………………………………………………...34
ii
4.5.3 Judgmental ……………………………………………………………..35
4.6 Merits of ADR methods ……………………………………………………35
4.7 Presence of ADR service giving institutions ………………………………38
4.8 Proposed ADR methods ……………………………………………………39
4.9 The Progress of ADR methods in Ethiopia ………………………………...39
4.10 discussions …………………………………………………………………40
5. Conclusions and Recommendations

5.1 Conclusions ………………………………………………………………...41
5.2 Recommendations ………………………………………………………….42
Reference: …...........................................................................................................43
Appendices
Appendix A case study ……………………………………………………………45
Appendix B 1 questionnaire to contractors ……………………………………….46
Appendix B 2 questionnaire to consultants ……………………………………….53
Appendix B 3 questionnaire to project owners ……………………………………61
Appendix C thesis proposal ……………………………………………………….70
iii
Acknowledgment
We would like to acknowledge our advisor Wubishet Jekale Mengesha (Dr. Eng.) for
his constructive comment and great support for the successful accomplishment of this
thesis work.
We are also indebted to those contractors, consultants and project owner who were
willing to fill the questioner and share their views and ideas in the different issues of
the thesis work.
Last but not least, our deepest gratitude goes to our families for their continuous
support during our stay in the university.
iv
List of Figures and Tables page
List of figures
1. Figure 2.1 idealized procedure for the research methodology……….
2. Figure 3.1 flow chart for risk decisions………………………………..15
3. Figure 4.1 proportion of respondents…………………………………. 30
4. Figure 4.2 delivery system experienced ……………………………….31
5. Figure 4.3 reasons of disputes by the respondents…………………… 33
6. Figure 4.4 use of partnership ……………………………………….….35
7. Figure 4.5 use of dispute review advisor ………………………………35
8. Figure 4.6 judgmental methods together litigation …………………… 36
9. Figure 4.7 respondents opinion ……………………………………… 40
List of tables
1. Table 3.1 comparison of preventive and amicable verses arbitration and
litigation ………………………………………………………………...29
2. Table 4.1 distribution and return of questionnaire ……………………...30
3. Table 4.2 tendency of delivery system to arise a dispute ……………….32
4. Table 4.3 stakeholders trend to keep site diary ……………………….....32
5. Table 4.4 consultants timely response to a claim ……………………….33
6. Table 4.5 claim submittal by contractors ………………………………..33
7. Table 4.6 stakeholders action to a claim ………………………………..34
8. Table 4.8 ADR training …………………………………………………34
9. Table 4.9 implementation of Amicable method ………………………...36
Merits and demerits of dispute resolution methods:
10. Table 4.10 in terms of time …………………………………………..37
11. Table 4.11 in terms of cost …………………………………………...37
12. Table 4.12 in terms of relationships ………………………………….38
13. Table 4.13 in terms of process ………………………………………..38
14. Table 4.14 in terms of enforcements …………………………………38
15. Table 4.15 in terms of outcome ………………………………………38
16. Table 4.16 in general terms …………………………………………..38
v
Abbreviations:
CIC …………………Construction Industry Council
DRS …………………Dispute Resolution System
ADR …………………Alternate Dispute Resolution
CII ……………………Construction Industry Institute
CIIA …………………Construction Industry Institute in Australia
CIDA …………………Construction Industry Development Agency
AAA ………………….American Arbitration Association
DRA ………………… Dispute Review Advisor
vi
ADR methods focusing on: Preventive and Amicable approaches. AAU
Chapter 1 Introduction
1.1 Background
The complexity of today’s construction projects brings together many
stakeholders, skills and conditions, which are always variable. In the atmosphere of
complexity and uncertainty, some construction projects do not run as smoothly as
planned and hence exposes the stakeholders especially the client and the main
contractor to many problems.
Kwakye (2000) stated that though the construction industry is one of the
manufacturing industries, because of its particular characteristics like (its
fragmented organs, the presence of unpredicted workload, its transient
organization, and its irregular employment), it is hardly similar to other
manufacturing industries. In addition, because of its complexity, the industry
encounters the involvement of different types of professionals with their respective
forms of contracts and sub-contracts which are not always compatible CIC (1994).
For this reason, no construction projects are free from problems, and when
problems are not immediately solved as they arise, they can become major issues
which eventually end up before an arbitrator or in front of a court for resolution.
Thus construction disputes, if not resolved timely, become very expensive.
The visible expenses such as:
¾ Fees for attorneys,
¾ Expenses incurred due to expert witness,
The dispute resolution process itself along with the less visible costs
including:
¾ resources assigned to the dispute,
¾ lost business opportunities, and
The intangible costs like:

¾ damage to business relationships,
¾ Potential values lost due to inefficient dispute resolution
methods are considerably significant.
Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 1
Besides, when the client’s project becomes involved in a lengthy dispute, the
consequence is that it will no longer meet the original goal and expectation.
Kwakye (2000) elaborates this argument by stating that, the client stands to
suffer from the payment of high legal fees and delayed completion where as
the contractor fails to achieve the profit maximization objective as he/she
suffers financial loss from unpaid work and claims and the payment of legal
fees.
Therefore it would seem that the primary need is for a system where by the dispute
is settled smoothly and as much as possible at early stage which will minimize
unnecessary costs incurred in lengthy court process and arbitration in parallel with
improving relationships among stakeholders.
Taking all the above facts, this thesis attempts to assess the current practices of
dispute resolution methods within the Ethiopian construction projects and
proposes an effective approach to dispute resolution in a manner that
diagnoses the problem first, and then select a least invasive procedure that will
correct it- that is preventive and amicable approaches.
1.2 Problem Statement

Cost, quality, time and healthy business relationships are the necessary issues when
we talk about the dispute of a construction project. The problem is not because of
the existence of dispute itself, but how to deal with its consequences, and in which
method to resolve it. Untimely resolved disputes have a higher impact on the
stakeholders of a project. If so, how can we minimize this impact with out
jeopardizing the objectives of the contracting parties? Since the goal of every
construction project stakeholder is the completion of a project that meets the
objectives of time, cost, and quality together with continuing business
relationships. To achieve that goal, introducing/improving the use of Preventive
and Amicable DRS can minimizes the impacts of disputes in the Construction
Industry of Ethiopia. (See Appendix.C)

1.3 Objectives of the study

Understanding the causes of conflicts at the primarily phases of the project would
help the stakeholders to practice preventive methods. And also being aware of
different ADR methods during the execution of the project would help the parties
to save their time and to minimize unnecessary costs due to lengthy court
processes. As a result, the objective of this thesis is:
¾ To minimize unnecessary costs due to lengthy court and arbitration
process.
¾ To improve relationships among stakeholders.
1.4 Thesis Lay out

This thesis has five chapters. The first chapter presents the background,
problem statement, objective of the study and the structure of the thesis
organization.
The second chapter briefly describes the research methodology followed in
writing this thesis.
The third chapter is a literature review on the subject of alternate dispute
resolution methods, preventive and amicable approaches with comparison
verses arbitration and litigation methods are reviewed to assist as a background
for this thesis work.
The fourth chapter is analysis of the collected data from the respondent
together with discussions.
The fifth chapter deals with conclusions of the results together with the
recommendations and future areas in which extensive research is highly
needed.

Chapter 2 Research methodology

2.1 Research methodology
Webeshet (2004) citing Burns (2000) and Kumar (1999) stated that a research is a
systematic investigation to find answers to a problem; similarly a research is also a
process for collecting, analyzing and interpreting information to provide solutions
to quires. In line with the definitions this thesis tries to address the following
research questions (Appendix C)
¾ How to minimize impacts of disputes?
¾ How to encourage stakeholders to use Pre-judgmental dispute resolution
systems?
To study the constraint and to find appropriate solutions identifying the key parties
(Stakeholders) involved in the decision- making at various stages of the
construction process is vital, Wubeshet (2004).According to Wubeshet these
stakeholders can be
¾ Project Owners :( Implementing Agencies and Beneficiaries)
¾ Project Sponsors and Regulators :( Financers and Regulatory bodies)
¾ Project Providers or Doers :( Consultants and Contractors)
¾ Other interested group :( Professional and Business Associations,
Educational Institutions, Medias, and the Public at large )
For the purpose of this thesis, we only focused on the two major actors of the
construction projects-Project Owners and Project Providers or Doers. This is
because:
¾ From observations of the current situation the two stakeholders have huge
role in the construction projects and as a result the majority of disputes is
within these two stakeholders
¾ In turn the other stakeholders would be beneficiaries from the improved
relationships of the two stakeholders

Following the identification of the problem, this thesis is conducted in five major
phases:
¾ Literature reviews are done on theories used in different construction
industries worldwide with respect to dispute resolution methods and used
as a theoretical background.
¾ Questionnaires were prepared and distributed to randomly selected
stakeholders mixture of contractors, consultants and project owners; to
asses their attitudes. The distributed questionnaires included objectives of
the research. And they are structured to cite:
o Different causes of conflict including delivery systems.
o Stakeholders opinion what ADR method they prefer to settle a
dispute.
o Understanding the awareness of stakeholders and to know which
ADR method they often used to resolve potential disputes, and
o Stakeholders experience how they describe the merits of different
ADR methods.
¾ Analysis of the collected data is conducted to identify the root causes of
disputes, their resolution together with future trends to be used for dispute
resolution.
¾ Real Case were studied and presented to answer the problem statement.
¾ Conclusions were forwarded together with recommendations as to how
implement effective dispute resolution systems.
The following figure illustrates the idealized procedure implemented to the

research methodology.
Figure 2.1 idealized procedure for the research methodology.
Problem Literature Questionnaire Analysis Conclusion and

identificati review preparation and and case recommendatio
ons distribution study n

Chapter 3 Literature Review

3.1 construction disputes
3.1.1 Definition:
According to Whitfield J, (1998) conflict is more than simple disagreement. His
definition depends on whether we examine the noun or the verb forms of conflict:
A conflict (noun) can itself be defined in three different ways:

¾ It is a state of opposition or hostilities, for example a war or a battle.
¾ It is a clashing of opposed principles; conflict of beliefs.
¾ It is an opposition of incompatible wishes or needs with in an
individual and the distress resulting from this; internal conflict.
He says, however, in the construction industry there is a tendency to use the word
conflict to its meaning as a verb:
¾ To struggle; or contend; argue.
¾ To contradict; disagree with.
Is there any difference between conflict and dispute?

The terms- Conflict and Dispute seems to be used interchangeably within the
Construction Projects. The confusion appears to have arisen with development of
international conflict management strategies an approach in which the term
‘dispute’ is used rarely Fenn (1997).
Aberra (2005) cited the definition given by:
¾ Brown and Marriot (1993) says conflict exist in the mind of an
individual, when s/he perceives a situation of incompatibility among
objectives, where as a dispute is a conflict of which both parties are
conscious and which is the subject of alteration between them.
¾ Costintino and Merchant (1996) define further conflict as the
fundamental disagreement between two parties of which a dispute is
one possible outcome; it has issues, positions and expectations for
relief.

¾ Vein Fenn et al (1997) similarly suggests, conflicts exists where there is

an incompatibility of interests. When a conflict becomes irreconcilable
and the mechanics for avoiding it are exhausted, or inadequate,
techniques for resolving the dispute are required.
As a summary from the above definitions and comparisons between conflict

and dispute, we can define construction dispute as a conflict of an incompatible
interests, of which both parties are conscious and which involves
disagreements, argument, over issues capable of resolution by themselves or a
third party intervention.
3.1.2 Causes of disputes

Disputes in construction are inevitable and range from minor differences over
the meaning of contract clause to major differences that lead to termination of
the project. These disputes can be addressed only when we understand the root
causes of disputes.
CIC (1994) states the following main reasons for disputes that can be raised
due to:
¾ Consultants
- Design errors
- Design inadequacies
- Delay in settling claims -
- Late and/or incomplete information
- Lack of coordination of information from different sources
- Ambiguous specifications
- Variations and late confirmation of variations
- Inexperience
¾ Client
- Unrealistic expectations with poor briefing
- Changes of mind during construction
- Poor financial arrangements leading to late payments
-Ridged budget

-Interference by client in contractual duties of the contract

administrator
¾ Contractor
- Inadequate site management
- Poor programming
- Poor workmanship
- Disputes with sub-contractors/ suppliers
- Late payment of sub-contractors/suppliers
¾ Sub-contractors
- Terms of sub-contract and/or miss-mach with main contract
- Inability to substantiate costs at the appropriate time
- Failure to follow condition of contract
¾ Suppliers
- Failure to define performance or purpose
- Failure of performance
In general, the major causes of disputes arise from areas such as Uncertainties
during the design phase, Poor contact documentation, Failure to adhere to the
contract, and inefficiencies of the Stakeholders.
3.1.3 Impact of dispute

The existence of conflict is not necessarily bad in and of itself. In fact it is a necessary
catalyst that allows organization to survive, evolve and progress in changing times.
Therefore the goal of dealing with conflict is not to eliminate but to respond it
constructively rather than destructively Alan J (1998). He elaborates; dealing with
conflicts constructively results in well considered decision and moves the organization
toward achieving its objectives. Dealing with conflicts destructively, on the other hand can
result in worst decisions, low moral and unhappy employees.
The construction industry is divers by its nature. The people working in it come
from a broad range of crafts and professionals. It is further enriched by the
presence of other parties with an interest in the end results, such as the developer,
financer, the planning authority, the construction regulator and the public at large
whose built environment is important to them economically and aesthetically. The

projects tackled by this diffuse industry are not only wide ranging and varies in
their end uses but also with in their types. Each project is unique; plans,
specifications, site conditions, construction methods, the disciplinarians involved,
and the goals of the participating parties all vary. All these have a great tendency to
arise disputes in the construction industry and they are fairly common, vary in their
nature, size and complexity (Gibson and Richard (2006), Whitefield J. (1998),
kwakye (2000), Fisk (2000)).
Furthermore, Whitefield J. (1998) elaborates why we need to control disputes:

1. We need to avoid the unnecessary escalation of minor disputes in to a
major conflict. In a conflict people often become stressed to such a
degree that many seek medical help to overcome anxious at work. If
we do not control, we may be facing with those symptoms of stress
that are potentially dangerous.
2. We need to control to prevent a diminution of our good relationships
with our customers and future clients.
3. We must try to prevent the conflict from impacting on the time and
quality of finished products.
4. We should bear in mind that to resolve a construction dispute by legal
or arbitral will be significantly more expensive than managing conflict
in the first place.
3.2 Alternative Dispute Resolution

3.2.1 Definition
Alternative dispute resolution is often used to describe a wide variety of dispute
resolution mechanisms that are short of or alternative to full scale court process.
The term can refer to everything from facilitated settlement negotiation in which
disputants are encouraged to negotiate directly with each other prior to some other
legal process to arbitration or mini-trials that look and feel very much like a court
room.
All forms of alternative dispute resolution methods share some common elements
of distinction from the formal judicial system. The following points are seen as
common elements in many literatures (like: Charness (1996), Pruitt and Rubin
(1986), Kwakye (2000), Fisk (2000), and Center for Democracy and Governance
(1998))
¾ Informality: most fundamentally, ADR methods are lees formal than court
processes. In many instances, the rules of procedure are flexible, without
formal pleadings, extensive written documentation, or rules of evidence.
This point is important for reducing delays and costs of dispute resolution.
¾ Application of equity: ADR methods provide the grounds for the
application of equity rather than the rule of law. Each case is decided by a
third party or settled by the disputants themselves, based on principles and
terms those seem equitable for that particular case, rather than on uniformly
applied legal systems.
¾ Direct participation and communication among disputants: ADR
methods encourage more direct participation by the disputants in the
process and in designing settlements, more direct dialogue and opportunity
for reconciliation among disputants. There are also potentially higher levels
of confidentiality with less power of enforcement.
3.2.2 What can Alternative Dispute Resolutions do?

Alternative dispute resolution methods can be designed to meet a wide variety
of goals. Some of these goals are related to improving the administration of
courts and the settlement of disputes. According to Center for democracy and
governance (1998) they do have also an input for economic restructuring;
particularly this is when efficient dispute resolution procedures are
implemented.
Within the context of rule of law, ADR methods can:

¾ Support and complement courts. This is when
o Case backlog impairs court effectiveness
o Complex procedures impair court effectiveness.
¾ By-pass ineffective and discredited courts. This could be achieved

o When implementing the existing judicial system is unlikely

to be effective
o When complex or technical disputes can be handled more
effectively by specialized ADR systems.
¾ Increase satisfaction with dispute resolution. This is when
o High cost, long delay, and limited access undermine
satisfaction with existing judicial process.
o the legal system is not very responsive to local conditions
o Cultural norms emphasize the importance of reconciliation
and relationships over wining in dispute resolution.
¾ Reduce delay in the resolution of disputes.
o Delays are caused as a result of complex formal procedures.
o Court resources are insufficient to keep up with case backlog.
¾ Reduce the cost of resolving disputes.
o High costs in the courts are driven by formal procedures or
the requirement of legal representation.
o Court filings costs are high.
o Court delays impose high cost on the parties.
3.2.3 Limitations of ADR

Although ADR methods can play an important role in many development efforts,
they are ineffective, and perhaps even counter productive in some instances. To
this point the Center for Democracy and Governance (1998) cited the following
points:
¾ Define, Refine, and Establish Legal Framework: this is to say that ADR
methods do not set precedent, nor do they promote a consistent application
of legal rules. They seek to solve individual disputes on a case by case
basis, and may resolve similar cases in different ways if the surrounding
conditions suggest that different results are fair. This is because ADR
methods are means of achieving equity rather than rule of law. For the
construction industry disputes, the agreements reached between the parties
or the decisions imposed on them only considers ‘what best fits for the
situation at hand’ rather than the rule of law.

¾ They do not work well in the context of extreme power imbalances

among the disputing parties: these imbalances of power are often the
result of discriminatory norms in society, and may be reflected in ADR
method results. Even when the imbalance is not a reflection of
discriminatory societal norms, most ADR methods do not provide legal
protections for weaker parties. Similarly to disputes in construction a more
powerful party may press the weaker into accepting an unfair result, so that
the settlement may appear consensual, but in fact result from coercion.
¾ They are not used to resolve cases that require public sanction: since
the results of the ADR methods are not public, they are not appropriate for
cases which require some form of public sanction or punishment. When it
comes to a construction industry there are laws which prohibit some cases
not to be resolved by arbitration.
¾ They are inefficient to resolve disputes involving disputants or
interested parties who refuse to participate or who can not participate
in the process: this is because the results of most ADR programs are not
subject to standards of fairness other than acceptance of all participants.
When it comes to the construction industry they are inefficient if one of the
participants is not willing to involve themselves in the process.
3.2.4 Different categories of Alternative Dispute Resolution

methods
There are different categories of the ADR methods that can be implemented
within the construction projects. Charness (1996) classified them across two
dimensions:
¾ By procedures that are followed and
a) Private: these procedures are completely private and managed by
the parties themselves, they are preferred when both parties are
willing to avoid litigation as a resolution method.
b) In-court or court-annexed: these procedures are managed by the
court.

¾ By degree of process control and responsibility for the result.

a) Decisional process: the appointed neutral by the disputants, has
the authority and responsibility to impose a solution on the
disputants.
b) Facilitative process: the appointed neutral acts as a facilitator
who helps the parties to achieve their own solution.
c) Advisory process: here the appointed neutral offers an opinion
on
contested issues, but this opinion is not binding. He also offers
his suggestions as to the likely out come if pursued to courts.
Wubishet (2005) also classified these categories as follows

¾ Preventive methods: these include Partnering, use of dispute resolution
advisors and use of Facilitators for early neutral evaluation and advice
to prevent disputes.
¾ Amicable methods: these include Negotiation, Mediation, Conciliation
and Mini-Trials where the parties resolve their disputes in a less
formal, non-adversarial environment.
¾ Judgmental methods: these include Adjudication, dispute review board,
arbitration and litigation where the parties present their case for a
binding resolution by a third party.
For the purpose of this thesis we adopted the later classifications. Because:
¾ Our approach resembles the later one (APPENDIX C).
¾ Both classifications try to address similar concepts.
In addition, we did not consider litigation as a judgmental method since we have

taken Adjudication and Arbitration as alternatives to litigation.
3.2.4.1 Preventive methods

Although disputes are inevitable within the construction projects, implementing a
timely intervention to address the initial cause of the problem while they are
manageable could prevent reoccurrences of the same problem during the

construction process and could save the project from falling apart. In addition to
this, there is also an issue ‘how best ‘to address them.
To tackle the issue ‘how best’ to address disputes, Groton (1997) suggested the
following points:
¾ To consider the unique nature of the construction process.
¾ To consider other alternatives to settle disputes, than proceeding to
litigation.
¾ The commitment of the parties in advance to use dispute resolution
methods when problems arise, in doing so they could create an atmosphere
conducive to solving problems.
¾ The use of the dispute resolution methods early in the project to enhance
their effectiveness.
Based on Groton’s suggested points, we have the following methods as a

preventive approach to disputes:
¾ Risk assessment and allocation
¾ Partnering
¾ Dispute Review Advisor
3.2.4.1.1 Risk assessment and allocation

As no construction project is risk free, all construction activities expose contracting
parties to risk. Kwakye (2000) also stated that, by its very nature, there is no
construction project that can be undertaken with out an element of risk.
The principal guideline in determining whether a risk should be transferred to

another is whether the party assuming the risk has both the competence to assess
the risk and the expertise to control or minimize it. Fisk (2000) added also to
consider whether the shift of the risk from the owner to another party will result in
savings to the owner.
In addition, while assessing the risk, the following factors influence the owner:
¾ His in-house engineering and design staff resources.

¾ The type of construction to be under taken.

¾ The degree of details.
¾ Accuracy and completeness of the plan and specification.
¾ In some cases the urgency of the project.
Many professionals, also believe that the success of the project and the prevention
of disputes depend on the proper assessment of risk. To this point miscalculations
in risk assessment can lead to significant changes and rework, resulting in added
costs and delays. Detailed project scope definition is a major component of risk
assessment, which in the first place, is conducted before commencement of the
works CII (1995). Within the project scope, changes that have a negative impact
introduce a threat to the success of the project. These changes frequently lead to
claims. However a thorough project definition prior to the start of detailed design
avoids a large percentage of changes and their related impacts. A well-defined
project scope allows the owner to effectively communicate his desires to the
designer, who then has the information needed to design the project to meet the
owner’s needs, goals and expectations Gibson and Pappas (2003).
Figure 1 shows a modified logic flowchart for risk decisions from Fisk (2000).
3.2.4.1.2 Partnering
Partnering, attempts to establish working relationships among stakeholders through
a mutually developed formal strategy of commitment and communication. It is not
a contract type but recognition that every contract includes a covenant of good
faith. It attempts to create an environment where trust and teamwork prevent
disputes, foster a co-operative bond to everyone’s benefit and facilitates the
completion of a successful project Stephenson (1996).
Aberra (2005) also defined partnering as a process which does not indicate any
legal relationships rather it aims to create a good stakeholder relationship from the
outset. He also stated that a central objective of partnering is to encourage the
contacting parties to change their traditional adversarial relationships to a more
cooperative team-based approach.

Figure 3.1 a modified logic flowchart for risk decisions.
Recognition of exposure to possible loss
Estimate maximum possible loss and probability of occurrence
Is maximum possible loss severe?
Yes No
Analyze factors affecting

size of possible loss
Reduce sources of loss Reduce size of loss
Does any severe

possible losses remain?
Yes No
Transfer risk to others Assume calculated risk

Assume risk
Is risk still
too high?
Yes No
Do not go ahead Go ahead

The origins of partnering, as a construction management concept, are relatively

recent dating from the mid 1980’s. According to the National Economic
Development Office (NEDC) report cited in Denny and Angela (1997), true
partnership in the formal sense only become established in 1984 between Shell and
Partners. However, this is not to say that partnering did not exist prior to that
period, rather partnering between contractors and private client is as old as
construction it self. For the emergence of partnering as a force in the construction
industry, most commentators /professionals in the construction industry give credit
to the work of the Construction Industry Institute of the United States –CII and for
the US Armey Corps of Engineers.
Currently, there are two different categories of partnering and within these
categories there are a variety of types. The two categories according to Bennet
(1995) are:
¾ Strategic partnering or Multi-project partnering or less frequently referred
as second-level partnering. It takes place when two or more firms use
partnering on a long term basis to undertake more than one construction
project
¾ Project partnering or Single-project partnering less frequently referred as
first-level partnering. It takes place when two or more firms come together
in a partnering arrangement for a single project.
Because partnering has to do with long-term relationships, it follows that more

gains and benefits are likely to be achieved from the longer term strategic
partnering as opposed to the shorter duration project partnering arrangement.
However project partnering can be a stepping stone to strategic partnering.
Kubal (1994) listed six criteria as being essential to successful partnering.

However it could be argued that these criteria are equally essential to the success
of non-partnered projects. But if these points are not in place, the partnering
process is at greater risk.
¾ There must be no weak links among the team members.

¾ Owners must be properly represented and active in the project.

¾ The composition partnering team should, whenever possible remain stable
for the duration of the project.
¾ Partnering should start at the design stage.
¾ There is a need to appoint a team leader to oversee and ensure that
partnering principles are well implemented.
¾ The involvement of major sub-contractors and manufacturers is crucial.
Although on the one hand partnering is viewed as “saving money and making work
more enjoyable”, there are also some disadvantages Denny and Angela (1997).This
are:
¾ Stale ideas due to lack of stimulation which can occur when the same
partners are in a stable relationships
¾ The cost of consultants may be higher. This is due to it’s flexibility to
produce more alternative solutions, design consultants have greater work
load as a result higher fees are expected.
¾ Investment risk
¾ Corruption
In general for a partnering to be successful, it needs an equal level of

commitment from all partners!!!
In addition, though it is ideal to assume that disputes will not arise in the non-
adversarial culture of partnering relationships, it is of great value to have
contingences in place. According to the CIIA (1996) of survey on partnered
projects in Australia, 91% of the respondents agreed that a dispute resolution plan
was an essential element of partnering. It also indicated that in projects where
partnering arrangements failed, 43% of them had no formal dispute resolution plan.
CIDA (1993) suggests; parties in partnering should try to address the following
issues while implementing a dispute resolution procedure.
¾ Resolve the problem at the lowest level of authority.

¾ Unresolved problems should be sent upward by both parties in a timely

manner, prior to causing project delays.
¾ No jumping of levels of authority is allowed.
Although the dispute resolution procedure is within the General Conditions of

Contract (Art.25, 2006), the partnering implementation plan should incorporate
mechanisms that prevent escalations of differences in to disputes which inevitably
hinder the project under the contract. The principal benefits of partnering
according to CIIA (1996) are:
¾ Reduced exposure to litigation.
¾ Improved project out comes in terms of cost, time, and quality.
¾ Increased chances of financial success.
¾ Healthy relationships of participants.
3.2.4.1.3 Dispute review Advisor

Dispute review advisor is a neutral third party who simply advises on potential
disputes which require clarification as to the best method of reaching a settlement.
Abera (2005) citing (Fisher et al 2001) stated that dispute review advisors are
normally experts in the field of issues at hand and help the parties to identify
contractual issues early and process them through to agreed conditions. The
Dispute Review Advisor needs to display some mediation skills.
Also the AAA (2004) stated that the Dispute Review Advisor attends periodic
meetings, review essential project documents and assist in the identification and
resolution of issues and potential problems. A dispute is presented to a Dispute
Review Advisor at a hearing and his determination is addressed as a non-binding
decision.
According to the AAA (2004) the following elements contribute to the success of
Dispute Review Advisor.

¾ The Dispute Review Advisor is neutral and is subject to the approval of the
contracting parties.
¾ The Dispute Review Advisor’s fees and expenses are shared among the
parties. Here the costs vary on how often the Dispute Review Advisor is
asked to resolve disputes.
¾ The Dispute Review Advisor is nominated at project initiation before any
disputes have arisen.
¾ The Dispute Review Advisor keeps abreast of activity developments by
means of periodic review or relevant documents and regular site visits.
The advantages include:

¾ Fewer disputes due to early intervention.
¾ Reduced exposure to litigation.
¾ Smoother relationships of the parties through out the construction
period.
3.2.4.2 Amicable Methods

These are dispute resolution mechanisms that bring the disputant parties in to a round table
to settle their disputes mutually, by themselves or presence of third party facilitation. Such
as:
3.2.4.2.1 NEGOTIATION
Negotiation may be considered as an art of arriving at a common understanding through
bargaining or the contract, such as specification, prices, time of performance, and terms
(Kwakye 2000).
Negotiation is a procedure where two or more people with diverse interests and opinion
meet together to agree how they achieve a common purpose (Whitfield J 1998). He further
suggests four rules to have effective negotiation:
1- No negotiation with out preparation!
Negotiations are very complex activities which involve a whole range of humane emotions
and responses, and they need to be planned. Thus, preparation is everything to begin
negotiation, to make reasonable concession, and to turn a disadvantage to an advantage.

2-knowleage is power, get it and keep it!

As with most areas of life, knowledge is power, and therefore the great knowledge you
have about your case; what do we want? What can we afford? And what is the probable
outcome? And the opponent’s; what are they likely offer? What are they able to pay?
Under what terms would they expect us to settle? The more powerful you will be. General
knowledge is useful, but specific knowledge can swing a conflict negotiation completely
in your direction.
3- Never give a concession with out one in return!
It is a paramount important that in any negotiation, you must keep your purpose firmly in
mind and do not be diverted from that goal by the tactics of the opposition.
4- Always get agreement in writing!
When the parties finally reach a settlement then the actual mechanics of the agreement
must be worked out. Once an agreement has been reached, the terms applicable to that
agreement are also agreed.
Whitfield J (1998) also says; if a dispute is going to be resolved, we must avoid tactical
behavior. We need to build or perhaps rebuild one that has been damaged or even
demolished. This is only done by honest, ethical and assertive negotiation. The tactics
used below have a single purpose: to prevent you from attaining your goal, a fair
resolution to unavoidable dispute. So, you must ignore it. They will only deflect who are
willing to be deflected. All tactics can be avoided by having a strong determination to get
what you want from the negotiation and keeping that purpose in front of your mind at all
times. Such us:
¾ The wince: This tactics pressures you in to reconsidering your offer with out
actually rejecting it. For example, you need more time to carry out variation.
The client asks you how much you need and you tell him. He winces and takes
a sharp intake of breath. You now feel uncomfortable and you take your eyes
off your goal. At this particular moment you may find yourself reducing the
requested period with out any concession whatsoever from the other side.
¾ Silence: This is to pressurize you by causing to be uncomfortable. You make
your opening statement and the other party just sits silently, saying noting.
Because most people dislike long silences and find them embarrassing and

uncomfortable, you are tempted to fill the silence. Generally speaking, amateur
negotiators are so desperate to end the silence that they will fill it with a
concession. Once again the opposing party has extracted a concession because
you took your eye off your goal, and he has had to concede nothing.
¾ Lack of authority: Say you are in the middle of negotiation and you offer to
make a concession if the other side makes a concession in your favor. The
person opposite accepts your concession, but says that he is unable to make the
concession in you favor because he has not got that authority. This tactic can be
in two ways: firstly to block negotiation which are not going in his favor, and
secondly to enable him to refer back to his superior. He can then use his
superior as an excuse for not giving a concession in return.
¾ Trial ballooning: This is to find out your best price. If, for example, you are
seeking $150.000 to settle the dispute, but you are prepared to negotiate, your
opponent will make the following suggestions; could we reach a deal if a were
to give you $ 135.000? Is that an acceptable figure? If your response is yes, we
can live with that figure. Then he may well say, we thought $120.000 was a
reasonable figure; perhaps we could split the difference and agree $127.000?
Effectively what he has done at one fell swoop is to reduce your real asking
price significantly with out offering any concession in return.
In detail, as a means of obtaining tactical advantages over the opponents in any

negotiation, Kwakye 2000 suggests the following negotiation guidelines:
¾ Keep the objective in mind.
¾ Adjust your end to suit your means.
¾ Exploit the line of least resistance.
¾ Take an approach that offers alternative objective.
¾ Keep your plan adaptable to changing circumstances.
¾ Do not put your weight behind an approach while your opponent is on guard.
¾ Do not renew an attack along the same lines or in the same form after it has
failed once.
Advantages
¾ Negotiation is inexpensive
¾ Negotiation maintains relationships.

Disadvantages
¾ Negotiation fails after a long and protracted period of discussion because they
are not binding.
Suggested solution- Establish a time table for the negotiation. Set aside a number
of hours or days for the negotiator and limit the duration of the discussions. The
benefit of so doing is, it concentrates negotiator’s mind.
¾ The informality will permit negotiations to raise surprise issues or irrelevant
points.
Suggested solution- We can set an agenda. We can agree to limit the points in
discussions and outlaw time, wasting discussions or irrelevant issues. By doing so,
it helps the parties by limiting the issues in dispute.
We strongly believe that once the disadvantages of negotiations are overcome, we

have a very powerful method of controlling disputes at our fingertips. Assuming we
know how to negotiate effectively, win-win negotiation. That is, both parties will be
satisfied by having a fair compromise.
3.2.4.2.2 Mediation/conciliation
Mediation is an extension of negotiation process. Parties who have been unable to
resolve disputes use an impartial third party to assist them in reaching a solution. The
core value of mediation is the principle of self determination. This means that the
parties who are affected by a dispute decide the outcome of a dispute Haley N. (2001).
Further, citing Professor Lon Fuller he elaborates: mediation has the capacity to
reorient the parties toward each other, not by imposing rules but by helping them to
achieve a new and shared perception of their relation ship that will divert their
attention toward each other.
Unlike an Adjudication process, where a third party intervener imposes a decision, no

such compulsion exists in mediation. The mediator aids the parties in reaching a
consensus by facilitating their communication and negotiations, but it is the parties
themselves who shape their agreement. Thus, mediation is at all times a consensus
process.

Why a mediator is needed?

Fisk (2000) states the following circumstances or desires why a mediator is needed.
When:
¾ Parties are unable to narrow the gap between the expectations of one group
and the inflexibility of the others.
¾ Too many issues are open and the parties are unable to get movement along.
¾ The parties wish a mediator to explore and narrow the differences between
them.
¾ There is a desire to resolve a problem mutually and end a dispute amicably.
¾ It is desired to furnish the parties with a realistic look at the demands and
possibility of obtaining them.
¾ The parties wish a mediator to be used as a conduit through which a private,
confidential disclosure can be made with out jeopardizing their original
position.
¾ There is a wish to give the parties some idea of how their positions look to an
impartial person.
¾ There is a wish to avoid negative consequences, such as lawsuits.
Advantages
¾ The mediation process is viewed as more expeditious, inexpensive and
procedurally simple than adversarial problem solving. It enables the parties to
define what is satisfactory to them by transcending the narrow issue in the
disputes to focus on the understanding circumstances that contributed to the
dispute.
¾ Moreover, mediation helps the parties re-adjust their conflicting perspectives

and view their concerns in a much broader frame work than simply legal
issues in a legal system.
¾ Finally, mediation has great potential as an empowering process. The

disputants control the outcome of the process and this usually results in a high
degree of compliance with mediated agreements.

Common problems of mediation

Hon Chi Yi (2005) in his research paper has investigated seven common problems of
mediation with their respective suggested solutions, in preventive or in dealing them, as in
the eyes of construction mediation practitioners:
1-Parties do not prepare to agree
To prevent, better preparation by the mediator, educate the parties and carry on properly
the procedural rules may help.
2- Parties focus at positions not interests
There is a requirement for development/training an ability to analyze and spotting an issue
or interests on the mediator. Positions should be valued but the interests should always be
focused by the mediator. Adequate preparation beforehand can also help.
3- Mediator direct parties
It depends on the character and interpersonal skills of the mediator to strategically or not
to direct the parties. Sometimes, tactical directing the parties may be helpful for the
settlement.
4- Mediators do not have enough creativity
The mediator must be creative and this can be attained through interpersonal skills,
improvement and personal development. That is, learn from daily life.
5-Mediators have no patience
Patience can be achieved through interpersonal training and by acting listen carefully and
attentively.
6-Mediators ignoring emotions
Emotions should be addressed during the mediation by let the parties to express their
feelings. However, the mediator should have the final control on the atmosphere in order
not to let it go too far.
7-At start, wrong parties are present
The mediator should check the appropriate persons, having authority to make decisions, to
attain the mediation from the beginning by his experience.
Mediation is generally used before arbitration or litigation. It may proceed to either of the
two dispute resolution method. It may be used, however, even after an arbitration or
litigation but prior to an award. Since mediation is treated as a settlement negotiation;
unless and otherwise the parties agree or there is a compulsory provision with in their

contract that governs the means of resolving disputes, evidence concerning it is not
admissible in any subsequent arbitration or litigation.
We strongly believe that, In order to attempt a successful mediation, a mediator should
utilize the suggested solutions and make them his posses to minimize the most common
problems to be arisen. So that, he can facilitate the disputes to be settled amicably with a
lesser cost, with in a reasonable time and keeping the parties future working relationships.
3.2.4.3 Judgmental methods

These methods are quite limited within the context of positive personal interaction
as they are frequently adversarial. In adversarial environment, disputants usually
employ advisors and their fees may not be within the parties’ interest.
¾ Adjudication: it is a dispute resolution method where the adjudicator

responds to the disputants when needed. On the receipt of the adjudicator’s
response the parties can either choose to abide by his decision or proceed to
arbitration at the end of the construction project.
¾ Arbitration: it is a dispute resolution method in which the solution
recommended in a binding term by an impartial third party (not by a court)
chosen by the disputants for that particular purpose.
3.2.5 Litigation
Litigation is a dispute resolution method which involves the use of the courts
where a third party passes a binding decision. This method of construction dispute
resolution is lengthy, extremely expensive and highly adversarial. More over as the
case should be prepared for trial, it is inevitable that significant period of time will
elapse between the commencement of proceedings and the trial as a consequence
delays in resolution is a common phenomenon.
3.2.6 Preventive and Amicable vs. Arbitration and Litigation

In comparing the two categories:
¾ In Arbitration and Litigation, the final power of decision rests on the third
party which is subjected to vary limited judicial review. Where as in

Preventive and Amicable methods the third party has absolutely no power
beyond that of persuasion.
¾ In arbitration, an arbitrator normally takes a passive role, leaving it largely
to the parties to present their cases, which is similar to litigation. While in
Preventive and Amicable the third party plays an active role in shaping the
process together with the disputants.
¾ In Arbitration and Litigation the third party avoids private communications
with the parties concerning issues of the dispute and their position. Where
as the third party in the Preventive and Amicable methods tries to
communicate privately with each party for the purpose of learning their
private views and interests with respect to the dispute at hand.
¾ Perhaps most important, in arbitration and Litigation, the third party
imposes upon the parties a decision that he/ she made and that may please
neither disputants. Where as in Preventive and Amicable the third party
guides the disputants to a decision that they can have a major role in
shaping and achieving it.

Table 3.1 Comparison of Preventive and Amicable vs. Arbitration and Litigation
Characteristics Preventive and Arbitration Litigation
amicable
Place/conduct Private, bilateral Private, bilateral Public courts,
initiation, initiation, unilateral
voluntary voluntary initiation,
compulsory
Process Informal, before a Formal: Highly formal,
neutral third party conforming to before a judge
rules of
arbitration, before
an arbitrator
Resolution Mutually accepted Award imposed Decisions
agreements; by an arbitrator imposed by a
option of judge
arbitration or
litigation if
dissatisfied
Outcome Usually Unsatisfactory Unsatisfactory
satisfactory legal win or lose legal win or lose
Business cases cases
relationships
maintained
Time/cost Usually fast and Can be time Time consuming
economic consuming and and uneconomic
uneconomic

Chapter 4 Findings and Discussions

4.1 Preliminary Remarks
The following findings from the questionnaire were used only for the purpose of
this thesis!
¾ The questionnaires were presented with questions designed to know
the causes of disputes, stakeholders’ intention to resolve disputes
using ADR and their awareness towards ADR, to gauge how often
they use ADR methods, and merits of ADR.
¾ The questionnaires were designed and distributed to the main
participants of a construction project, mixtures of client,
consultants, and contractors.
¾ The table for the distribution and collection of the questionnaire is
presented as follows.
Table 4.1 Distribution and return of questionnaires
Distributed Returned
Stakeholders in No. in No. Returned in %
Clients 1 1 All
Consultants 16 7 43.75%
Contractors 13 7 53.85%
Total 30 15 50%
Figure 4.1 proportions of respondents
6.66%
client
46.67%
consultant
46.67% contractor
4.2 Causes of disputes

From the response obtained, this thesis organizes causes of disputes in to two parts:
¾ Disputes due to delivery systems.
¾ Disputes during the execution of the work.

4.2.1 Disputes due to delivery systems
In the questionnaire,
o Four types of delivery systems were presented for the
respondents.
o The purpose was to get /know what delivery systems they
experienced for the last ten years and to rate the tendency of the
delivery systems to arise a dispute.
Figure 4.2 Delivery system experienced in %
Delivery Systems Experienced in%
80
60
40
Consultants
20
0 Contractors
DBB DB CM
Delivery Systems
¾ The above figure indicates the two mostly experienced delivery systems in
the construction industry of Ethiopia are Design-Bid -Build and Design-
Build /turnkey.
Table 4.2 Tendency of delivery system to arise a dispute

Very Low Very None
High
High Low
Force account 14.28% - 14.28% 14.28% 57.14%
DBB 9.1% 45.45% 36.36% 9.1% -
DB 12.5% 25% 50% 12.5% -
CM - 33.33% - 66.66% -

From the above table, the majority of the respondents indicated that:
¾ DBB delivery system has a higher tendency to arise a dispute in a
construction project.
¾ Force account delivery system has no any tendency to raise a dispute
¾ DB delivery system has low tendency to raise a dispute
¾ CM delivery system has very low tendency to raise a dispute
4.2.2 Dispute during the execution of the work

Disputes on-site or disputes during the execution of the work includes causes
because of uncertainties during the design phase, during tender preparation, site
possessions, causes due to poor contract documentation, lack of communication,
late payment and so on.
Keeping site diary files plays an important role during claim submittal. To this
point, how often do stakeholders keep site diary?
Table 4.3 stakeholders trend to keep site diary.

Stakeholders Yes, always Sometimes Not, at all
Consultant 71.43% 14.28% 14.28%
Contractor 85.71% 14.28% -
The above table shows that most of the consultants and contractors do take site
diary files.
The other stage that has to be taken for a claim to be valid is preparing and
submitting a claim by the contractors and giving timely and impartial response to
the claims by consultant.
Table 4.4 timely responses to a claim by consultants
Frequently Sometimes Not at all
71.43% 28.57% -
Table 4.5 Preparing and submitting a claim according to contractual

proceeding by contractors
Yes No
71.43% 28.57%

From the above two tables we can get that most of the contractors prepare and submit
their claims according to the contractual proceeding and most of the consultants give
their response timely for claims.
Figure 4.3 Reasons of disputes by the respondents.
reasons of disputes by the respondants
90%
responces in percentage
80%
70%
60%
50%
Series2
40%
30%
20%
10%
0%
Different site
specifications
Design error
Variation and
conformation
inadequate
possession
communication
Failure to
Misunderstand
documentation
Late payment
condition
contract
Ambiguous
Late site
condition
contractual
Design
of contract
condition
its late
Poor
Poor
causes of disputes
4.3 Stakeholder experience and awareness towards Alternative dispute

resolution methods
Table 4.6 stakeholders’ experience.
Initiate ADR 93.33%
Initiate litigation 7.67%
4.4 Awareness and training

Stakeholders’ awareness about alternative dispute resolution methods is the prime
factor to resolve a dispute.
Table 4.7 awareness about alternative dispute resolution methods

Stakeholders Very good Good Neutral Not bad Bad
Owner 1 - - - -
Consultant 42.85% 14.28% 28.58% 14.28% -
Contractor 14.28% 57.14% 14.28% - 14.28%

Training for the stakeholders regarding alternative dispute resolution methods

improves their awareness and help to enable them to differentiate the different
methods which could best fit the problem at hand. From the above table, more
consultants have responded that they have very good awareness, where as more
contractors have good awareness. This could be attributed to the trainings they had
as shown in the table below
Table 4.8 ADR Trainings

Stakeholders Yes No
Owner 1 -
Consultant 71.43% 28.57%
Contractor 57.14% 42.86%
The above table shows most stakeholders had attended trainings.
4.5 How often do stakeholders use different alternative dispute resolution

methods?
This is to gauge how often stakeholders use preventive, amicable or judgmental
methods to their disputes
Preventive methods
Two types of preventive methods, partnering and dispute review advisor are used
to rate how frequently they are implemented.
Figure 4.4 use of partnering.
partnering
Frequently
72.73%
Sometimes
27.27%
Not at all 0%

As can be seen from the chart, 72.73% of the respondents used partnering to
prevent potential disputes frequently with 27.27% applying it sometimes. In
general all of the respondents implement partnering though the degree of frequency
differs.
Figure 4.4 use of dispute review advisor.
DRA
Frequently 20%
Sometimes 30%
Not at all 50%
The above figure indicates only 20% of the respondents used the dispute review
advisor frequently for the dispute resolution mechanism where as 50% of the
respondents never implemented it. To this point stakeholders are lacking the
awareness of the advantages that is exploited in using the dispute review advisors
in times of dispute resolution.
Amicable methods
Two methods, negotiation and mediation/conciliation are used to rate how
frequently they are implemented.
Table 4.9 use of Amicable methods.

Amicable methods Frequently Sometimes Not at all
Negotiation 84.62% 15.38% -
Mediation/conciliation 30% 50% 20%
The above table shows Negotiation is highly effective means of resolving disputes.
This is because it takes a minimum time and cost for the resolution process. The
response of the respondents also confirms that 84.62% of them have used it while
15.38% of them have used it sometimes.

Mediation/Conciliation when compared to negotiation, the majority of respondents

(50%) choose to implement it less frequently.
Judgmental methods together with Litigation

Arbitration and adjudication together with litigation have been used to rate how
frequently they are implemented.
Figure 4.6 judgmental methods together with litigation.
Judgmental Methods together with

80
Litgation
70
60
50
40
Arbitration
30
Adjudication
20
Litigation
10
0
As can be seen from the above figure, most of the respondents choose not to
implement these methods. The reasons could be due to the fact that implementing
these methods costs lots of money, with longer time in addition to their adversarial
nature.
4.6 merits and demerits of using different dispute resolution methods

Here the respondents were presented with different alternative dispute resolution
methods together with litigation. The factors used in rating these methods are:
time, cost, relationships of the stakeholders, the process, enforceability and
outcome.

Table 4.10 in terms of time

Resolution methods Very satisfactory Fair Dissatisfactory
satisfactory enough
Partnering 66.66% 8.33% 16.66% 8.33%
Negotiation 84.6% 15.38% - -
Mediation/Conciliation 33.33 50% 16.66% -
Adjudication 10% 50% 10% 30%
Arbitration 7.7% 30.7% 7.7% 53.8
Litigation - 8.33% 8.33% 83.3%
Table 4.11 in terms of cost

Resolution methods Very satisfactory Fair enough Dissatisfactory
satisfactory
Partnering 81.81% - 18.18% -
Negotiation 60% 33.33% 6.67% -
Mediation/Conciliation 36.36% 54.54% 9.1% -
Adjudication 9.1% 36.36% - 54.54%
Arbitration 7.7% 15.37% 15.37% 61.53%
Litigation - 8.33% - 91.67%
Table 4.12 in terms of relationships after

satisfactory
Partnering 83.33% - 16.67% -
Negotiation 69.23% 23.1% 7.66% -
Mediation/Conciliation 30.76% 53.84% 15.38% -
Adjudication 8.33% 33.33% 16.67% 41.66%
Arbitration 7.69% 15.38% 30.77% 46.15%
Litigation 8.33% 8.33% 8.33% 75%

Table 4.13 in terms process

satisfactory
Partnering 50% 20% 10% 20%
Negotiation 50% 25% - 25%
Mediation/Conciliation 27.27% 45.45% 9.1% 18.18%
Adjudication 10% 50% 20% 20%
Arbitration 36.36% 9.1% 18.18% 36.36%
Litigation 20% 20% 10% 50%
Table 4.14 in terms of enforceability

satisfactory
Partnering 41.67% 16.67% 33.33% 8.33%
Negotiation 28.57% 42.85% 21.42% 7.14%
Mediation/Conciliation 30.77% 38.46% 20% 6.67%
Adjudication 8.33% 41.67% 25% 25%
Arbitration 7.14% 35.71% 21.42% 35.71%
Litigation 25% 25% 8.33% 41.67%
Table 4.15 in terms of the out come

satisfactory
Partnering 41.67% 41.67% 8.33% 8.33%
Negotiation 50% 41.67% 8.33% -
Mediation/Conciliation 36.36% 45.45% 18.18%
Adjudication 25% 37.5% 12.5% 25%
Arbitration 26.67% 13.33% 33.33% 26.67%
Litigation 10% 20% 20% 50%

In general terms with respect to time, cost and relationships for the judgmental
methods the respondents shifts towards dissatisfactory level where as for the
preventive and amicable methods the respondents shifts towards the very
satisfactory level.
Table 4.16 in general terms:
Resolution methods Very Satisfactory Fair Dissatisfactory
satisfactory enough
Partnering
Negotiation
Mediation/Conciliation
Adjudication
Arbitration
Litigation
3.7 Respondents’ opinion

¾ With regard to the presence of ADR service giving institutions, almost all
of the respondents agreed that its presence would help to improve the
settlement of disputes using alternative dispute resolution methods.
¾ With regard to future preference of dispute resolution methods to settle
disputes
Figure 4.7 respondents opinion.

Respondents opinion %
100
90
80
70
60
50
Series1
40
30
20
10
0
g
n
n
n
n
in
io
t io
io
tio
tio
er
at
at
ia
tra
ca
t ig
rtn
i
ed
ot
di
bi
g
Li
Pa
ju
Ar
Ne
Ad
dispute resolution methods
4.8 discussions
1. Why do construction stakeholders dispute?
Untimely resolved disputes have great impact on the project cost time and
quality. They also damage trust and impede development partnership between
the parties. To the contrary, if cost, time and quality of a project are negatively
affected, then development is hampered. According to the majority of the
respondents, figure 4.3, from the questionnaires, the four main reasons for
disputes are:
9 variation and its late confirmation,
9 design inadequacies
9 design error
9 different site conditions
All are the result of deficient design/ project definition and contract document
preparation works that could have been improved during design phase and
contract documentation stage of the contract process. These have been
confirmed with the literature review. Adequate site investigation at the design
phase is essential for the design consultants to produce optimum design
solution for the project. It is an experience from the practice of the industry

that, spending some more time and cost at the design and documentation stage
of the project process saves time and cost during implementation.
2. What are the most experienced and preferred ADR methods?

According to the result of table 4.6, table 4.9, figure 4.4, and figure 4.6 shows
that majority of the respondents have initiated ADR and experienced with the
use of partnering and negotiation, in contrary to use litigation, to resolve their
disputes.
Findings from figure 4.7 and table 4.16, shows that most respondents prefer to
use negotiation, partnering and mediation/conciliation to resolve potential
disputes. Generally they have agreed that these methods are enough
satisfactory in terms of time, cost, relationships, process, and implementation
and out come.

Chapter 5 Conclusions and Recommendations
5.1 Conclusions
This thesis shows that why do we need and how we can minimize the impacts of
disputes on the construction industry. Cost and time are concerns of great issues to
be addressed when a proposed project is aimed to hit its target successfully. But
there is no such a project that can get there. The major causes for this unsuccessful
completion are the disputes that ever exist with the construction projects. And it
highly affects the construction industry
Preventing disputes could minimize its impacts. This can be achieved by trying to
understand and prevent the causes of disputes which seems or might be the
potentials for a dispute to arise. Such as, risk assessment and allocation and
detailed work definition during the design phase, and setting common goal
between the stakeholders to execute the project highly minimizes the causes of
disputes and in turns its impacts on the construction industry.
There is no such a way in which one can prevent disputes completely. Thus the
other issue would be ‘how to resolve’. A dispute should be resolved in such a
manner that it shouldn’t take longer time and higher cost and the relationship
among stakeholders shouldn’t be disturbed. If a dispute is not resolved at its infant
stage with including goodwill of stakeholders to do so, it goes higher and higher to
a state at which its end results would be the worst.
Using Preventive systems and less costly and shorter time ADR resolution methods
satisfactorily minimizes the so called impacts of disputes on the industry. Training
stakeholders in areas related to ADR and participate them in a related workshop is
a means to encourage them to use a Pre-judgmental dispute resolution methods. On
the other hand, the presence of ADR service giving institutions for the settlement
of disputes amicably is a parallel issue to be considered.

5.2 Recommendations
Even if a perfect set of contract documents were to be devised, there would still be
disagreements and it is at large up to the participants of the projects to develop
integrated and comprehensive approaches to resolve disputes so that they can
achieve the objectives stated at the out set.
This thesis work also indicated that the two alternative resolution methods:
preventive and amicable are preferred for settling potential disputes in the future.
The recommendations are:

¾ ADR service giving institutions should be improved in their capacity and
should get a support from the government as well as the construction
project participants.
¾ Trainings to stakeholders with regarded to alternative dispute resolution
methods should be given continually to increase their awareness as to have
a clear understanding of the different dispute resolution methods.
¾ Involving construction management professionals during the planning
phase to assist the project owners to briefly define scopes of the projects.
¾ A trend of addressing disputes to litigation should be minimized and
substituted with the less invasive methods of ADR.
¾ Further research should be done to study the effectiveness of ADR methods
in resolving construction disputes.
¾ Not only dispute resolution awareness but also claim management trends
should be improved so as to minimize disputes that arise due to
mismanagement of claims.
¾ A further research on areas of claims management could support the
effective implementations of ADR methods.

Reference:
1. A.AKwakye (2000) Construction Project Administration In
practice
2. Construction Industry Council (1994) Dispute Resolution: A
report which identifies the disputes that arise in the construction
industry and existing methods of resolution.
3. Denny McGeorge and Angela Palmer (1997) Construction
Management.
4. Fisk (2000) Construction Project Administration
5. American Arbitration Association (2004) The construction
industries guide to dispute avoidances and resolution.www.adr.org
accessed on July 2006
6. Center for democracy and Governance bureau of global
program field support and research (1998) Alternative Dispute
Resolution Practitioners Guide.
7. Wubishet Jekale Mengesha (2004) performance for public
construction projects in (least) developing countries – federal road
and educational building projects in Ethiopia.
8. Wubishet Jekale Mengesha (2005) claims in local construction
projects: Problems and Prospects.
9. Construction Industry Institute (1995) Pre-project planning hand
book. www.construction-institue.org accessed on July 2006
10. Gibson, G.E and M.P Pappas (2003) Starting Smart key practices
for developing scopes of work for facility projects.
11. Kubal, M.T (1994) Engineered quality in Construction: partnering
and TQM.
12. Stephonson. R.J (1996) Project partnering for the design and
construction industry.
13. Peter Fenn (1997) Conflicts and disputes in construction.
14. Groton .J.P (1997) Alternative dispute resolution in the
construction industry, Dispute Resolution Journal.

15. Aberra Bekele (2005) Alternative dispute resolution methods in

construction industry: Assessment of Ethiopian situation.
16. Jeff White field (1998) conflicts in construction: avoiding,
managing, resolving.
17. Pruitt, D and J. Rubin (1986) social conflict: Escalation,
Stalemate and Settlement.
18. Gary B.Charness (1996) Alternative Dispute Resolution and the
settlement gap.
19. Construction Industry Development Agency (1993) Partnering:
A strategy for excellence.
20. G. Edward Gibson and Richard J. (2006) Decision making,
transactional cost and dispute resolution.
21. Hon Chi Yi (2005) The common problems and suggested solutions
of Mediation in the Construction Industry in Hong Kong.
22. Peter Fenn (1997) Conflicts and dispute in construction.
23. Alan J. (1998) Alternative Dispute Resolution for Organizations.
24. Nolan Haly (2001) Alternative Dispute Resolution 2nd edition.

Appendixes
Appendix A Case study
CASE-1 Modjo-Awash-Mille Road Rehabilitation Project
Contract 2: AwashArba-Gewane
Project length...........................................136km
Type of construction……………………Asphalt concrete
Detail engineering designer…………… Gauff consult
Design review by ……………….............Nor consult
Construction supervisor…………………International consultants & Techno crafts
Civil works contractor………………… Keangnam Enterprise Ltd.
Financer ……………………………… IDA
Contract commencement date…………. April, 01, 1999
Scheduled completion date…………… September, 28, 2001
Original contract amount……………….192 Million ETB
Original contract period……………………….. 30 months
Total time claimed ……………………………..542 calendar days
Granted extension of time……………………....273 calendar days
Means of settlement…………………………….Amicably
The contractor KEANGNAM Enterprise Ltd. claimed additional time to complete

the works.
Where as the parties – the employer (the Ethiopian Roads Authority) and the
contractor (KEANGNAM Enterprise Ltd) negotiated and agreed a settlement to
amicably resolve the claims rather than leaving the option open for protracted
arbitration.
In detail:
1. The employer granted an extension of time of 164 calendar days on an
interim basis there by extending the date of completion until March 13,
2002. After having further scrutinized contractor’s claim for grant of over
all extension of time based on the mutual discussion held on February 11,
2002, between the parties the employer agreed to further grant an
additional extension of time of another 109 calendar days there by
establishing a revised completion date as June 30, 2002.

2. Where the contractor agreed to waive off his right to claim, under the
contract, any further extension time or monetary compensation in
connection with any events that have occurred or started to occur to date or
for any future or on-going effects of events that have occurred previously.
The contractor also agreed to waive off his right to claim under the
contract for any extension time or monetary compensation in connection
with any future events unless warranted under “Employer’s risk” .he
further confirmed that he will not seek any revision of rates or claim any
extra amounts other than payable as per BOQ for the overall quantities
(including additional quantities) of varies items executed/ to be executed
under the agreement.
3. In addition the contractor agreed to under take at no additional cost to the
employer any accelerating measures whether they have been implemented,
alleged to have been implemented or will be implemented to meet the
revised contract completion date, June 30, 2002.
4. It is further agreed that ‘escalation’ as provided under the particular
conditions of contract and payments for providing for ‘Engineer’s
facilities’ shall continue to be paid to the contractor under the relevant
BOQ item until extended date of completion 30th June 2002
Appendix B-1
Questionnaires to Contractors on Alternative Dispute Resolution Method in
Ethiopian Construction Projects,
Dear sir/madam……………………………………….
Re: Alternate Dispute Resolution Methods
We are currently undertaking a Bachelor of Science degree in AAU,

department of construction technology & management. For the fulfillment of
this, we are required to research a topic area and produce a thesis. The topic
we have chosen is ADR methods focusing on preventive and amicable
approaches in the Ethiopian construction projects.
The objective of this thesis is:-

•To minimize unnecessary costs by lessening lengthy court processes and
arbitration.
•To improve relationships among stakeholders.

That can be achieved through introducing and improving the use of preventive and
amicable dispute resolution systems in the Ethiopian construction project.
We would be very grateful if you could complete the attached questioner and
return it in a reasonable time- within a week.
N.B. the information you provide will be used only for the academic purposes
and treated strictly confidential. Individual firms will not be identified.
Yours faithful, Amanuel Solomon 0911-40- 04-13

Ashenafi Degefa 0911-98 -16-96
Selameyihun Yirga 0911-65 -84-53/0911-70-49-82
FAX. 0112-77-75-69
Attachments:
To whom it may concern -------------- 1 page
Questionnaire ----------------------------- 5 pages
1. Name of the company _______________________________ 1.1 Year

established_________
1.2. Category and class________________ 1.3.

Address__________________________
2. For the last ten years mostly in what type of construction projects have you
involved?
Public Private Non governmental Organization
Others please specify __________________________________________
3. Mostly what type of project delivery system was used to those projects in which
you were involved?
Force accounts The design and build delivery system
The design-bid-build delivery system The construction management
Other please
specify_____________________________________________

4. From your experience how do you rate the project delivery systems in terms of
their tendency to arise a dispute?
Force accounts Very high high low very low
none
The design-bid-build delivery system Very high high low very low
none
The design and build delivery system Very high high low very low
none
The construction management Very high high low very low
none
5. Did you keep site diary files or site book records for every project?
Yes No some times
6. Did you prepare and submit your claims according to contractual proceedings?
Yes No
7. Usually what were the causes of the dispute to those projects in which you were
involved?
a. Misunderstanding of conditions of contract g. Design errors
b. Poor communication between parties h. Design inadequacies
c. Variations and its late conformation i. Late payments
d. Failure to follow conditions of contract j. Ambiguous specifications
e. Poor contractual documentation k. Late site possessions
f. Different site conditions
l. Other, please
specify_____________________________________________________
8) For the above selected answers, please prioritize them by giving numbers.
a) _____ c) _____e) _____ g) _____ i) _____ k) _____
b) _____ d) _____ f) _____ h) _____ j) _____l) _____
9. How do you rate the role of the consultant/engineer while considering claims?
Usually biased to the non- claimant
Usually impartial
Usually biased to the claimant
10. Usually what were your actions to those claims?

Initiate ADR Initiate litigation
12. If you proceeded to litigation, please state the reason for not initiating ADR?
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
13. Do you have any unsettled disputes that are under litigation process?
Yes No
If yes, for how long? __________________
14. Have you tried to settle the disputes using ADR before they are under litigation
process?
Yes No
15. In your company how do you rate the awareness of ADR method in the
construction projects?
Very good Good Neutral Not bad Bad
16. In your company how often do you use preventive methods for potential
disputes in projects? Such us:
Partnering Frequently Sometimes Not at all
Dispute Advisor Frequently Sometimes Not at all
(Partnering is a method that the stakeholders implement consensually to create a
more productive working relationship on the project from the outset. It does not
indicate legal relationships)
17. In your company how often do you use amicable methods for potential disputes
in projects? Such us:
Negotiation Frequently Sometimes Not at all
Med/concili Frequently Sometimes Not at all
18. In your company how often do you use judgmental methods for potential

Arbitration Frequently Sometimes Not at all

Adjudication Frequently Sometimes Not at all
Litigation Frequently Sometimes Not at all
18. Have you ever had attended any trainings / workshops regarding ADR
methods?
Yes No
20. From your experience how do you describe the merits of using the following
ADR methods?
A) In terms of time savings
Partnering Very satisfactory Satisfactory Fair enough Dissatisfactory
Negotiation Very satisfactory Satisfactory Fair enough Dissatisfactory
Medi/Conci Very satisfactory Satisfactory Fair enough Dissatisfactory
Adjudication Very satisfactory Satisfactory Fair enough Dissatisfactory
Arbitration Very satisfactory Satisfactory Fair enough Dissatisfactory
Litigation Very satisfactory Satisfactory Fair enough Dissatisfactory
(Medi/conci = Mediation/conciliation)
B) In terms of cost savings

Partnering Very satisfactory Satisfactory Fair enough Dissatisfactory
Negotiation Very satisfactory Satisfactory Fair enough Dissatisfactory
Adjudication Very satisfactory Satisfactory Fair enough Dissatisfactory
Arbitration Very satisfactory Satisfactory Fair enough Dissatisfactory
Litigation Very satisfactory Satisfactory Fair enough Dissatisfactory
C) In terms of relationships among the stakeholders afterwards?

Partnering Very satisfactory Satisfactory Fair enough
Dissatisfactory
Negotiation Very satisfactory Satisfactory Fair enough
Dissatisfactory
Medi/Conci Very satisfactory Satisfactory Fair enough
Dissatisfactory
Adjudication Very satisfactory Satisfactory Fair enough
Dissatisfactory
Arbitration Very satisfactory Satisfactory Fair enough
Dissatisfactory
Litigation Very satisfactory Satisfactory Fair enough
Dissatisfactory

D) In terms of process (case evaluation….)

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
(Medi/conci = Mediation/conciliation
E) In terms of implementation (enforceability)

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory

F) In terms of outcome (fairness of the decision)

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
21. In your opinion:

A) Do you think that the formation/ presence of the ADR service giving institutes
in the country, such as the Ethiopian Arbitration and Conciliation Center would
help to improve the settlement of disputes using ADR methods?
Yes No
22. From your experience, which methods you will prefer to settle potential
disputes?
a) Partnering ‫ٱ‬ d) Arbitration ‫ٱ‬
b) Negotiation ‫ٱ‬ e) Adjudication ‫ٱ‬
c) Mediation/conciliation ‫ٱ‬ f) Litigation ‫ٱ‬
Please, order them (hint: first _____ then ____…)

_______ ________ ________ ________ ________ ________

Appendix B-2
Questionnaires for Consultants on Alternative Dispute Resolution Method in
Ethiopian Construction Projects,
department construction technology & management. For the fulfillment of

arbitration.
and treated with strict confidence. Individual firms will not be identified.

Selamiyihun Yirga 0911-65 -84-53/0911-70-49-82
FAX. 0112-77-75-69

Attachments:
1. Name of the company______________________________1.2. Year

established___________
1.3. Category and class________________1.4

Address_____________________________
2. For the last ten years mostly in what type of construction projects have you
involved?
Public Private Non governmental Organization
3. What type of project delivery system was used to those construction projects in
which you were involved?
Force accounts The design and build delivery system

Other please
specify_____________________________________________


none
none
none
none
5. Did you keep site diary file or site book records for every project?
Yes, always No, at all Sometimes
6. How often do you give your timely response/decisions to the contractor?

involved? Please prioritize them by giving numbers.

l. Other, please
specify_____________________________________________________
a) _____ c) _____e) _____ g) _____ i) _____ k) _____
b) _____ d) _____ f) _____ h) _____ j) _____l) _____

9. For the disputes to be settled, which method did you recommended?

Negotiation Mediation/conciliation Arbitration Adjudication
litigation
10. For your answer in the above question how do you rate it in terms of the
Process: Very satisfactory Satisfactory Fair enough
Dissatisfactory
Implementation: Very satisfactory Satisfactory Fair enough Dissatisfactory
Out come: Very satisfactory Satisfactory Fair enough

Dissatisfactory
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Yes No
13. Have you tried to settle the disputes using ADR before they are under litigation
process?
Yes No
14. In your company how do you rate the awareness of ADR method in the
construction projects?


Negotiation Frequently Sometimes Not
at all
Medation/concilation Frequently Sometimes
Not at all
methods?
Yes No

ADR methods?
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory


Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory


Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory


Yes No
disputes?
c) Mediation/conciliation ‫ٱ‬ f) Litigation ‫ٱ‬

_______ ________ ________ ________ ________ ________
Appendix B-3
Questionnaires to Project owners on Alternative Dispute Resolution Method
in Ethiopian Construction Projects,
department construction technology & management. For the fulfillment of

arbitration.

and treated with strict confidence. Individual firms will not be identified.

Selamiyihun Yirga 0911-65 -84-53/0911-70-49-82
FAX. 0112-77-75-69
Attachments:
1. Name of the company/organization________________________
1.2. Address__________________________
2. For the last ten years mostly to whom have you given your project?
Local firms Regional firms International firms
3. During those ten years what type of project delivery method have you used?
Force accounts The design and build delivery
system
Other please
specify_____________________________________________
4. For the above answer why did you choose that particular delivery system? Please
state briefly
_____________________________________________________________________
___
_____________________________________________________________________
___
_____________________________________________________________________
___
none
none
none
none
6. Have you done payments to the contractor according to the conditions of the
contract on every project?
Yes No

involved? Please prioritize them by giving numbers.

l. Other, please
specify_____________________________________________________
a) _____ c) _____e) _____ g) _____ i) _____ k) _____
b) _____ d) _____ f) _____ h) _____ j) _____l) _____
9. For the disputes to be settled, which method did you recommended?

Negotiation Mediation/conciliation Arbitration Adjudication
litigation
10. For your answer in the above question how do you rate it in terms of the
Process: Very satisfactory Satisfactory Fair enough
Dissatisfactory
Implementation: Very satisfactory Satisfactory Fair enough Dissatisfactory
Out come: Very satisfactory Satisfactory Fair enough

Dissatisfactory

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Yes No
13. Have you tried to settle the disputes using ADR methods while they are under
litigation process? Yes No
14. In your company/organization how do you rate the awareness of ADR method
in the construction projects?


Negotiation Frequently Sometimes Not

at all
Medation/concilation Frequently Sometimes
Not at all
methods?
Yes No
ADR methods?
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory


Dissatisfactory

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory


Dissatisfactory

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory


Dissatisfactory

Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory
Dissatisfactory

Yes No
disputes?
c) Mediation/conciliation ‫ٱ‬ f) Litigation
_______ ________ ________ ________ ________ ________


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ALTERNATIVE DISPUTE RESOLUTION

METHODS FOCUSING ON:

BY- AMANUEL SOLOMON

FACULTY OF TECHNOLOGY- SOUTH

DEP. OF CONSTRUCTION TECHNOLOGY &MANEGMENT

TITLE: Alternate dispute resolution methods:

APPROVED BY BOARD OF EXAMINERS

ADVISOR: ______________ SIGN. ________ DATE _________

E XAMINER______________SIGN._________ DATE _________

1.1 Background …………………………………………….………………… 1

4. Findings and Discussion

5. Conclusions and Recommendations

The intangible costs like:

1.2 Problem Statement

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 2

1.3 Objectives of the study

1.4 Thesis Lay out

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 3

Chapter 2 Research methodology

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 4

The following figure illustrates the idealized procedure implemented to the

Problem Literature Questionnaire Analysis Conclusion and

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 5

Chapter 3 Literature Review

A conflict (noun) can itself be defined in three different ways:

Is there any difference between conflict and dispute?

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 6

¾ Vein Fenn et al (1997) similarly suggests, conflicts exists where there is

As a summary from the above definitions and comparisons between conflict

3.1.2 Causes of disputes

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 7

-Interference by client in contractual duties of the contract

3.1.3 Impact of dispute

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 8

Furthermore, Whitefield J. (1998) elaborates why we need to control disputes:

3.2 Alternative Dispute Resolution

3.2.2 What can Alternative Dispute Resolutions do?

Within the context of rule of law, ADR methods can:

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 10

o When implementing the existing judicial system is unlikely

3.2.3 Limitations of ADR

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 11

¾ They do not work well in the context of extreme power imbalances

3.2.4 Different categories of Alternative Dispute Resolution

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 12

¾ By degree of process control and responsibility for the result.

Wubishet (2005) also classified these categories as follows

In addition, we did not consider litigation as a judgmental method since we have

3.2.4.1 Preventive methods

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 13

Based on Groton’s suggested points, we have the following methods as a

3.2.4.1.1 Risk assessment and allocation

The principal guideline in determining whether a risk should be transferred to

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 14

¾ The type of construction to be under taken.

Thesis by Amanuel Solomon, Ashenafi Degefa, Selamyihun Yirga. Aug. 2006 15

Figure 3.1 a modified logic flowchart for risk decisions.

Recognition of exposure to possible loss

Estimate maximum possible loss and probability of occurrence

Is maximum possible loss severe?

Analyze factors affecting

Reduce sources of loss Reduce size of loss

Does any severe

ADVISOR: ______ SIGN. DATE _

E XAMINER__________SIGN._ DATE _____