How to manage conflicts

Dr Mohammed Dulaimi, Buid.

The GCC construction boom has been widely talked about, observed and invested in.

However, the long term success and international recognition of any national industry is measured through its sustained professional levels of service, qualitative approach towards the finished product and proficient project management resource.

Construction in the Middle East is one of the most dynamic sectors within the wider economy, recording a real growth rate of 19.7% year-on-year in 2006, and expected to expand at a slower pace of 10.4% from 2008 until 2012, according to UAE Investment Bank Al Mal Capital.

Largely, construction projects across the region have maintained high levels of quality control while employing premium materials and tools. Many developers have invested heavily in importing expert resource, outsourcing skilled labour and purchasing certified and modern machinery.

While all this lays a strong foundation for the sector to develop rapidly while keeping with world class standards, it is the successful execution of project processes that ultimately influences costs, timelines, business relationships and overall recognition or in some cases criticism.

New research highlights one of the growing problems in the construction sector that requires immediate attention and support - expert understanding of construction law and dispute resolution.

Primary construction disputes involve delays on interdependent construction phases due to mismanaged time, inefficient processes and unclear contract terms that all undermine the business relationship between contractors, consultants and clients.

Research has shown that project managers spend as much as 70% to 80% of their time resolving conflict and disputes. Providing professionals with the knowledge and skills to manage and resolve conflict and disputes more efficient and effectively will reflect positively on project progress and quality of the product.

Addressing some of the key complexities that grow in such a massive industry can be challenging especially without specialist advice.

In the GCC, some leading key complexities faced in the construction sector include:

1. Validity of instructions from client or consultants to contractors and engineers;

2. Misconceived understanding by clients regarding the deliverables or services promised by contractors - clients can assume they are entitled to ask for further support or specifications than the contractor has agreed to or can do;

3. Weak management skills in the areas of legalities and dispute resolutions that prolong conflicts;

4. Cultural diversity that leads in many cases to poor communication and understanding among the different parties to the contract.

If we review matured markets where massive development projects have been completed, we can understand that conflict is in the nature of projects.

The coming together of individuals with differing perspectives on the project, differing professional orientation and, in many cases with conflicting corporate objectives provide the seeds for conflict. It is for the professionals, and in particular the project manager, to avoid dysfunctional conflicts and promote functional differing views and ideas.

Often these disputes cannot be resolved between just the two parties - contractors and clients - these disagreements require either an expert third party or in-house legal expert to review facts, try to restore amicable relations and arrive at a mutually acceptable decision without causing major delays or setback to the construction process.

In the UAE, the most active mediator for construction related disputes has been the Dubai International Arbitration Centre (Diac). The Diac has achieved the successful creation of a legal framework for resolutions and legislation that offer basic guidelines to both contractors and clients.

The primary aim of dispute resolution experts involves offering alternative dispute resolutions and explaining the applicability and feasibility of these alternatives to both the client and contractor in order to create a comprehensive understanding and satisfying solution for both parties.

The regional construction market is at a stage where the introduction of professional courses in construction law and dispute resolution comes as a timely welcome medium to an industry that is facing growing complications as projects move ahead into different phases of completion.

Construction law experts are better equipped to understand the intricacies involved with management process, misguided client notions and encumbrances faced in the region - this in turn enables them to create models for dispute resolution that can be applied by many developers and management teams.

To address existing complexities new specialist higher education programmes can train local resources to effectively manage conflicts and create an atmosphere to adopt alternatives to quickly resolve conflicts.

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