Alternative dispute resolution is a combination of techniques implemented for resolving disputes in a

construction project, without seeking any rectification from the courts.

This is more prominently found in countries like India, Germany where a set of resolution processes
called the alternative dispute resolution techniques act as the main means and mode between the
dispute creating parties (disagreeing parties) to end up with a solution through a written contract or
agreement.

Alternative dispute resolution is a collective means of sorting and settling disputes happening with or
within different parties in an organization.

History and Features of Alternative Dispute Resolution (ADR)

The techniques of alternative dispute resolution were originated in Unites State in the year 1970. It
has been developed as an after effect of dissatisfaction of traditional method of litigation, which was
performed for resolution of disputes.

The increasing costs, delays, and uncertainty with the increase in the volume of these construction
dispute litigation was the motivating factor behind the development of ADR.

Before the entry of alternative dispute resolution techniques, arbitration and dispute boards were
the two forms used to bring resolution for disputes caused. These methods at that time became
commonly employed in international projects especially for those that employs FIDIC contracts.

The methods possess well documented strength and any one of the two would have bought a
solution for a dispute. But with time, problems relating to the time consumption of arbitration
method and cost of maintenance of dispute board became increasing. This has then led to come up
with certain specific ADR techniques.

Processes of Alternative Dispute Resolution Techniques

The ADR processes and techniques will come under any one of the two main categories. They are:
 Adjudicative ADR

Non-Adjudicative ADR

Adjudicative Alternative Dispute Resolution Techniques

The adjudicative ADR comprise an individual who is a third party, who deals with the decision on
dispute merits. The Non adjudicative will assist the parties involved in the dispute to negotiate with
each other to end up with a settlement.

The above mentioned initial technique of arbitration and dispute boards comes under the category
of adjudicative ADR. Another example is a combination of Mediation / arbitration technique.

Non Adjudicative Alternative Dispute Resolution Techniques

Unlike adjudicative ADR, the non adjudicative ADR have many numbers of alternatives of which some
are mentioned below. These processes help to bring some flexibility in the use of an alternative.
Some of them are:

Mediation in Alternative Dispute Resolution Techniques

In this kind of alternative, a negotiated agreement is facilitated by a neutral third party between the
disputing parties. Now, this third party has no power to make decisions.

The third party or the mediator notes down all the merits and demerits of the dispute but does not
bring up a decision or suggest one. He might bring an indication on who have the strongest merit to
win the negotiation, which is considered by the court or the arbitral tribunal.

The main role of the mediator is to determine the area where both the parties can compromise with
each other. When the discussion goes well and is ready to have a settlement, this forms
the negotiation of an agreement.

The mediation from mere negotiation is the criteria carried out by the mediator or the process
of dispute resolution.

The mediation alternative followers have the opinion that this method understands and reduces the
dispute reasons and future disputes, through open communication between the parties.

Conciliation

This method involves the entry of conciliator who is supposed to lead the negotiations to be carried
out in a smoother way and to facilitate their negotiations. They dont involve in dealing or hearing
the issues between the parties.

Early Neutral Evaluation

This is a non binding process. To provide an evaluation, based on the merits of the case, any or both
the disputing parties will own a credible neutral party. The method must be implemented at an
earlier stage to avoid the possibility of major cost, which reflects the name early neutral
evaluation.

The neutral party only has a role in guiding the parties through the issue and have no role in binding.
After which, they can have negotiations alone thereafter.

This method turns out to be non-binding arbitration when this approach has to face a formal
hearing. This may be closely related to arbitration.
Mini Trial

This is one alternative which has the greatest use as a dispute resolution. This involves complex
questing based on laws and facts. Each part will present the case in an abbreviated form. For these,
they seek lawyers or experts.

The case is placed on the senior management of the parties for hearing. After hearing a negotiation
is carried out by the respective management system.

This method will help the disputing parties to see the problem and after effects of the problem from
outside perspective, to make them understand the severity and potential impact so that an easy
settlement can be made.

If necessary, a neutral party may be employed so that action will be facilitated and evaluated based
on the needs of the parties. Good understanding of the issues by the two parties is necessary for this
method of mini trial to be effective and appropriate.

Its not possible to conclude that a single form of litigation or alternative dispute resolution method
is a perfect choice of dispute resolution for all situations. The construction industry has resulted in
bringing up a wide variety of ADR processes that are worth.

Silent Features of Alternative Dispute Resolution Techniques (ADR) in Construction Projects

The alternative dispute resolution techniques in construction involves certain construction contracts
that are granted for disputes that must be dealt with a set of agreed dispute resolution procedures.

The most common and famous alternative dispute resolution processes used in construction
disputes other are mentioned below.

Adjudication

Expert Determination

Litigation

Meditation

Arbitration
Individual techniques or a combination of the three can be implemented. The above four techniques
are major ones. These can have sub categories that can provide a variety of choices of procedure for
specific disputes.

Some of the examples are the joint contracts tribunal (JCT) 16 Standard form of Building contract, the
FIDIC Conditions of contract, the New Engineering Contract (NEC) Engineering and the construction
contract.

Adjudication

As explained below adjudication involves the incorporation of a third party to give a decision on the
dispute. Now the method is known as pay first, argue later , a method of dispute resolution.

For this, the party must apply to the technology and the construction court so that the adjudicators
decision can be enforced. The adjudicators decision will be binding until it is not revised by litigation
or arbitration. These have certain benefits and demerits.

Benefits of Adjudication in Alternative Dispute Resolution

Adjudicator wont be involved in day to day running of construction contract

An adjudicator is a neutral person

Adjudication is a quick process

The cash flow is maintained throughout construction process

It is less expensive than court methods

Demerits of Adjudication

Before the commencement of adjudication, the dispute have to be aired between the
disputing parties

The adjudicator have limited power

If the part who loses does not pay, court proceedings are necessary to enforce the decision
of the adjudicator.

Expert Determination

Whenever there is a valuation dispute, we go for expert determination. These deals with disputes of
special nature like construction disputes. The expert determination forms one of the informal system
methods of resolution of disputes.

The parties must agree to accommodate the expert determination through an agreement (contract)
and agree that the expert determination will be binding.

Benefits of Expert Determination

Less economic way

Less expensive, quick method and less formal

Demerits of Expert Determination

Expert decision less tied to legal processes

 Enforcement of expert report cannot be carried out without court or arbitration

Litigation in Alternative Dispute Resolution Techniques

Among different methods of ADR processes, the court proceedings are the common method used to
solve the construction industry disputes.

The Technology and the construction court (TCC) is a court that is specialized in the same. They
govern and deal not only civil procedure rules but also TCC guide. The cases in TCC will be dealt with
judges specialized in TCC.

Advantages of Litigation in Alternative Dispute Resolution

The judge carry out the claiming process throughout

Complex issues can be carried out and dealt

Binding and enforcement of decision for the parties are obtained

Disadvantages of Litigation

The method is a slow process

Most expensive

The proceedings relating to the dispute will not be confidential.

Mediation in Alternative Dispute Resolution

The method of mediation as explained before is a common method used to resolve disputes. The
TCC court states that the parties with a disputed issue must be encouraged to go for ADR methods
for solution. In most of the cases, the solution will be mediation.

Benefits of Mediation

The mediator will be an intermediate person, who have no judgment or decision making. He
just facilitates the discussion

Mediators are experienced in dispute areas and with the judges of TCC

The business relationship can be maintained

 Mediation can go long for one to two days, bringing the decisions quickly

The happenings within the mediation are kept confidential

The mediator will help the parties to bring up a decision which is favorable for both the
parties.

Disadvantages of Mediation

Disclose of an important aspect related to their argument, may result in benefiting the other
part

The dispute will remain unsolved if no sort of agreement has been made. The cost for
mediation will go futile.

Arbitration in Alternative Dispute Resolution

This method is another form of litigation. Here the disputing parties will refer the dispute to a third
party. He is called as the arbitrator. The material facts, documents and relevant principles of law are
the basis for which the disputes are solved. This method is used mainly for international construction
disputes.

Benefits of Arbitration in Alternative Dispute Resolution

Arbitration is a confidential process

Based on the experience of the arbitrator, the parties can choose them.

Arbitration, unlike court proceedings, is a quick process

The method of arbitration is a flexible process

Disadvantages of Arbitration

The cost of arbitrator and arbitration venue must be taken by parties

An arbitrator has limited power to take the decisions.

Arbitration possess limited appeal rights

Cost will be similar to court litigation

Acceptance a Need for Alternative Dispute Resolution(ADR)

The increasing caseloads in the traditional courts have made the demand of ADR to increase. Now
some of the courts wanted the parties to resort their problems through ADR. The acceptance of ADR
is more among the public as well as the legal profession.

When compared to litigation through normal court means, ADR imposes a fewer cost. Not only in
terms of money but also in the choice of selection of best personality to talk for ones dispute and
based on confidentiality.

The chances for conflicts are higher with the increase in the size of construction projects. Most of the
cases the impact of money or finance is material, that will truly focus on project delay, defects in
service and contractual penalties.
The choice of litigation under such situation would affect the tempo of the project drastically.
Bringing up alternative dispute model ought to be an efficient and quick way of solving the rising
disputes in the construction project organization.