Improvement of alternative dispute resolution methods for settlement of disputes in construction projects in Sri Lanka

Abstract

Construction disputes are complex and technical in nature, making them more difficult to resolve than disputes in any other industry. As the volume of construction activities grows in Sri Lanka, there is a need to develop efficient and timely practices for resolving disputes. In the traditional context, the most commonly adopted method of resolving disputes was litigation. However, the limitations of the litigation process, such as cost, time, lack of confidentiality, and the adversarial system, led to the need for Alternative Dispute Resolution (ADR). The aim of the research is to develop strategies for enhancing the effectiveness of the Alternative Dispute Resolution (ADR) methods for the settlement of disputes in construction projects in Sri Lanka. The difficulties faced in the process of adopting the ADR methods have been identified, along with the advantages of the ADR process. The advantages of the ADR process include speed, cost-effectiveness, flexibility, confidentiality, and the maintenance of professional relationships. The objectives of the present research are to identify the current practices of ADR in the Sri Lankan construction industry, how to improve the effectiveness of ADR, problems faced during ADR, and advantages of ADR in construction industry. The mixed-method approach used to carry out this research is literature review, questionnaire survey, and expert interviews. From the literature review, the research identified ADR methods used were negotiation, mediation, adjudication, and arbitration. Further, ten industry experts from different fields, such as project managers, quantity surveyors, architects, structural engineers, construction managers, and legal advisors were also interviewed to gain expert knowledge of the industry. The results show that ADR practices such as negotiation, adjudication, mediation, arbitration, and Dispute Adjudication Boards are being used on a large scale in the construction industry. A remarkable contribution has been made by ADR practices in improving dispute resolution. However, there are some challenges that need to be addressed, including lack of awareness of ADR practices, complexities and cost, technology, voluntariness, and enforcement of ADR practices from a legal perspective. In order to address these challenges, several strategies were identified in this research, including awareness, education, and training; standardization of ADR practices; technology integration; effective communication and early intervention; collaborative practices; and regulatory support. These strategies are expected to enhance ADR practices in the Sri Lanka construction industry and contribute to more efficient dispute resolution.