Perception of contractors on usage of alternative dispute resolution methods in construction industry of sri lanka

Abstract

Construction industry is a complex and high-risk industry where large variety of parties with different skills are involved. Due to this multi-party involvement and their diversified interests, construction projects experience disputes. With the constant upsurge of complexities in construction industry, the industry would have to experience disputes among the parties for a foreseeable future. As disputes are unavoidable it is necessary to mitigate the negative impacts of it by using a proper method of resolution. Therefore, selecting the best method for resolving the dispute, influence in obtaining best solution. As the study aims to identify perceptions of contractors towards Alternative Dispute Resolution (ADR) methods and to identify significance of factors considering in selecting ADR method by contractors’, literature review was carried out to identify the factors influence in selecting ADR methods. Those collected data from the literature review was validated by a preliminary survey which had been carried out among experts in the area of dispute resolution. Then detailed questionnaire survey was conducted by using results of the preliminary analysis to evaluate the perception of contractors on ADR methods and to evaluate significance of factors which affect the selection of most suitable ADR methods. Research results revealed that negotiation is the frequently used method in dispute resolution in Sri Lankan construction industry and the most popular ADR methods from the contractor’s perception are negotiation and adjudication. Further, findings proved that considerable number of contractors have a high awareness on the legislation provisions relating to negotiation and its settlement and participant’s satisfaction rates are significantly high rather than other available ADR methods.