Avoidance of disputes arising from claims on building construction contracts : a study in Sri Lankan context

Abstract

Building construction projects are typically large and complex. Construction industry has experienced disputes over a decades across various project contexts. Such disputes are particularly prevalent in projects of complex nature, especially those involving claims. In recent years, claims in building construction projects have increased significantly and are now considered a primary source of disputes. Within public and private sector building construction contracts, many stakeholders lack a sufficient awareness of claims management and dispute avoidance strategies. Therefore, the implementation of the effective construction claim and dispute management mechanisms is essential. This research adopted a mixed method approach, incorporating semi structured interviews and a questionnaire survey to achieve its aim of exploring and analyzing the causes of disputes arising from claims in building construction contracts within the Sri Lankan context. The study further sought to identify effective strategies and provide recommendations for minimizing and avoiding such disputes, thereby contributing to the smoother execution of building construction projects in Sri Lanka. A purposive sample of seven professionals were interviewed to validate the findings of the literature review, and content analysis was employed to analyze the interview findings. The second stage of data collection involved a questionnaire distributed among experienced professionals engaged in the building construction industry, including engineers, quantity surveyors and selected legal practitioners with expertise in construction dispute resolution. The questionnaire findings were analyzed using the Statistical Package for Social Science (SPSS) and ranked using the Relative Importance Index (RII). Based on the findings, the recommended twelve strategies for dispute mitigation and avoidance include; re-draft and clarify contentious clauses (time bars, variation order process, payment timelines, and escalation indices), along with preparing contract summaries for site teams (S1, S20). According to the contract, payment discipline: through certification calendars, automated reminders, and the application of interest for overdue payments (S2). Mandate a single digital Data Management System (DMS) with metadata and audit trails; while enforcing site diary discipline (S3, S19). Ensuring front-end design gate (≥ 90% completeness) and early contract identification for buildability issues; combined with hard variation orders (S4–S5, S11). Providing claims and contract training (initial + annual refresh), supported by notice automation to avoid time-bar lapses (S6, S14). Establishing standing DAAB/DAB for early neutral evaluation and dispute avoidance (S7); maintaining risk registers on monthly basis (S15).