dispute resolution statistics for abu dhabi's construction industry - 14th july 2012 - combined...

Dispute Resolution Statistics for Abu Dhabi's Construction Industry - 14th July 2012

Results based upon the respondents last 5 years experience on typical construction projects in Abu Dhabi.

Combined Results Client Contractor Consultant

a)

b)

c)

d)

1.0

1.1 A client organisation (6.5 responses).

1.2 A contractor (9.5 responses).

1.3

Answered from the perspective of:

Where a response is made from more than one perspective with strongly agree or agree, then that response is apportioned to 1.1 client and/or 1.2 contractor and/or 1.3 consultancy accordingly.

All un-ticked items are deemed to be ticked under the "It depends" category.

The slice of the pie chart that relates to the "It Depends" category has been segregated; to show the whole result, whilst enabling the other categories to be compared proportionally side by side.

There was a total number of 31 responses to this survey, conducted between 14th June 2012 and 14th July 2012.

Methodology for interpreting the questionnaire responses.

This survey may not be used for any commercial purposes whatsoever. The opinions expressed in this survey do not necessarily reflect the views of the Chartered Institution of Civil Engineering Surveyors (ICES), its Council of Management or other committees or members, or those involved in conducting the survey. No material may be reproduced in whole or in part without the written permission of the ICES.

An independent consultancy (15 responses).

21%

31%

48%

Client

Contractor

Consultant

of 18




2.0The majority of our projects cost in excess of:

2.1 10 million U.S. dollars (AED 36 million).



Project cost.KEY: A = Agree & Strongly Agree; S = Sometimes Agree; D = Disagree & Strongly Disagree; X = It Depends.

A31%

S0%

D23%

X46%

A26%

S0%

D0%X

74%

A23% S

3%D

23%

X52%

A17% S

17%D

37%

X33%

A16% S

11%D

0%X

74%

A35%

S16%D

3%

X45%

A40%

S27%

D7%

X27%

A38%S

15%D

15%

X31% A

53%

S5%

D0%

X42%

A61%

S13%

D6%

X19%

A70%

S23%

D7%

X0%

A54%S

15%D0%

X31%

of 18




3.0A substantial proportion of our projects use the following as the base contract, subject to amendments.

3.1 FIDIC 4th edition 1987/1992.

3.2 FIDIC 1999 red or yellow books.

KEY: A = Agree & Strongly Agree; S = Sometimes Agree; D = Disagree & Strongly Disagree; X = It Depends.

Contract information.

A37%

S0%

D11%

X53%A

68%S

3%

D3%

X26%

A87%

S7%

D0%

X7%

A69%

S0%

D0%

X31%

A68%

S0%

D11%

X21%

A52%S

19%

D16%

X13%

A47%

S27%

D20%

X7%

A38%

S31%

D15%

X15%

of 18




3.0

3.3

3.4 Bespoke contracts.

NEC3 (Engineering & Construction Contract).

Contract information (cont'd). KEY: A = Agree & Strongly Agree; S = Sometimes Agree; D = Disagree & Strongly Disagree; X = It Depends.

A11%

S0%

D26%X

63%

A3%

S0%

D52%

X45%

A0%

S0%

D73%

X27%

A0%

S0%

D38%X

62%

A32%

S16%

D11%

X42%

A39%

S10%

D16%

X35% A

50%S

10%

D13%

X27%A

23%

S0%

D31%

X46%

of 18




4.0

4.1

4.2

4.3

A dispute adjudication board or adjudicator is appointed at the project commencement.


An independent expert is appointed to assist the parties in settling disputes.

A dispute adjudication board or adjudicator is appointed on an ad-hoc basis if required during the project.

Dispute resolution procedures.

A0%

S21%

D79%X

0%

A3%

S29%

D68%

X0%

A0%

S40%

D60% X

0%

A15% S

15%D69%

X0%

A32%

S32%

D37%

X0%

A45%

S23%

D32%

X0%

A47%S

27%

D27%

X0%

A62%

S0%

D38%

X0%

A0%

S58%

D32%

X11%A

16%

S48%

D19%

X16% A

27%

S37%

D17%

X20%A

15%

S62%

D8%

X15%

of 18




4.0

4.4

4.5

Mediation / counselling techniques are used to encourage the parties to settle their disputes.

Dispute resolution procedures (cont'd). KEY: A = Agree & Strongly Agree; S = Sometimes Agree; D = Disagree & Strongly Disagree; X = It Depends.

The Employer utilises his own dispute resolution procedure e.g. requiring management representatives from the parties to try and resolved the dispute, prior to Arbitration or Litigation.

A11%

S21%D

58%

X11%

A39%

S16%

D39%

X6%

A50%

S7%

D37%

X7%

A54%

S31%

D15%

X0%

A79%

S11%

D11%

X0%

A74%

S13%

D6%

X6%

A70%

S17%

D7%

X7%

A77%

S8%

D0% X

15%

of 18




5.0

5.1

5.2

5.3

Settlement of disputes.

The Engineer or Contract Administrator acts fairly, when making determinations.

The Engineer or Contract Administrator acts impartially, when making determinations.

An amicable settlement is reached within a reasonable time and at a fair value.


A21%

S37%

D42%

X0%

A32%

S39%

D26%

X3%

A33%

S47%

D20%

X0%

A46%

S23%

D15%

X15%

A11% S

5%

D84%

X0%

A35%

S23%

D42%

X0%

A47%

S27%

D27%

X0%

A46%S

38%

D15%

X0%

A11%

S26%D

63%X0%

A39%

S29%

D29%

X3%

A47%S

33%

D20%

X0%

A62%

S23%

D0%

X15%

of 18




5.0

5.4

5.5

5.6

Settlement of disputes (cont'd).

Arbitration is the preferred method of binding dispute resolution.

Litigation (the court system) is the preferred method of binding dispute resolution.

Disputes are usually settled before reaching Arbitration or Litigation stage.


A63%

S21%

D16%

X0%

A48%S

19%

D26%

X6%

A60%

S7%

D23%

X10%

A0%

S46%D

46%

X8%

A0%

S53%

D37%

X11%

A0%

S33%

D60%

X7%

A0% S

15%

D85%

X0%

A47%S

42%

D11%

X0%

A65%

S26%

D3%

X6%

A60%

S27%

D0%

X13%

A100%

S0%

D0%

X0%

A0%

S32%

D61%

X6%

of 18




6.0A substantial proportion of disputes are related to:

6.1

6.2

6.3 Valuation of variations.

Types of dispute.

Interpretation of drawings and specifications.


Interpretation of the contract conditions.

A61%

S32%

D0%

X0%

A74%

S19%

D6%

X0%

A80%

S13%

D7%

X0%

A69%

S15%

D15%

X0%

A100%

S0%

D0%

X0%

A68%

S26%

D3%

X3%

A63%

S37%

D0%

X0%

A31%

S38%

D15%

X15%

A89%

S11%

D0%

X0%

A74%

S13%

D6%

X6%

A63%

S17%

D7%

X13%

A77%

S8%

D15%

X0%

of 18




6.0

6.4 Extension of time entitlements.

6.5 Quality of design.

6.6 Quality of construction.

Types of dispute (cont'd). KEY: A = Agree & Strongly Agree; S = Sometimes Agree; D = Disagree & Strongly Disagree; X = It Depends.

A100%

S0%

D0%

X0%

A97%

S3%

D0%

X0%

A100%

S0%

D0%

X0%

A85%

S15%

D0%

X0%

A58%

S32%

D11%

X0%

A48%S

35%

D13%

X3%

A53%S

27%

D13%

X7%

A23%

S62%

D15%

X0%

A21%

S37%

D42%

X0%

A29%

S32%

D32%

X6%

A47%S

30%

D20%

X3%

A0%

S46%D

31%

X23%

of 18




7.0For a typical project caused:

7.1 Project delays in excess of:a) 1 month.

b) 2 months.

c) 3 months.

Impact of disputes (approximate); KEY: A = Agree & Strongly Agree; S = Sometimes Agree; D = Disagree & Strongly Disagree; X = It Depends.

A16%

S32%D

21%

X32%

A30%

S27%

D37%

X7%

A0% S

15%

D23%X

62%

A26%

S32%D

11%

X32%

A23%

S27%

D43%

X7%

A0%

S0%

D23%

X77%

A68%

S0%

D21%

X11%

A58%S

19%

D13%

X10%

A40%

S40%

D13%

X7%

A85%

S0%

D0%

X15%

A19%

S26%D

29%

X26%

A19%

S23%D

29%

X29%

of 18




7.0

7.2

a) 1%.

b) 3%.

Increased overall cost of project by more than:

Impact of disputes (approximate) cont'd. KEY: A = Agree & Strongly Agree; S = Sometimes Agree; D = Disagree & Strongly Disagree; X = It Depends.

A21%

S26%

D32%

X21%

A19%

S29%D

26%

X26%

A27%

S40%

D27%

X7%A

0%S

8%

D15%

X77%

A16%

S0%

D53%

X32%

A23%

S10%D

39%

X29% A

37%

S20%

D37%

X7%

A0%

S0%

D23%

X77%

of 18




7.0

c) 5%.

d) 10%.

Impact of disputes (approximate) cont'd. KEY: A = Agree & Strongly Agree; S = Sometimes Agree; D = Disagree & Strongly Disagree; X = It Depends.

A32%

S26%

D21%

X21%A

32%

S32%

D16%

X19% A

33%S

47%

D13%

X7%

A31%

S8%

D15%

X46%

A74%

S11%

D16%

X0%

A48%

S13%

D19%

X19% A

30%

S20%

D30%

X20%

A54%

S0%

D0%

X46%

of 18




7.0

7.3

7.4

A detrimental impact on the quality of the design.

Impact of disputes (approximate) cont'd.

A detrimental impact on the quality of construction work.


A32%

S58%

D11%

X0%

A23%

S42%

D32%

X3%

A27%

S30%

D43%

X0%

A0%

S46%D

38%

X15%

A11%

S47%

D42%

X0%

A19%

S42%

D35%

X3%

A33%

S37%

D27%

X3%

A0%

S46%D

46%

X8%

of 18




8.0A quicker settlement of disputes would have significantly:

8.1 Reduced project delays.

8.2 Reduced project costs.


Mitigation of dispute impact.

A79%

S11%

D11%

X0%

A74%

S16%

D6%

X3%

A77%

S17%

D7%

X0%

A62%

S23%

D0%

X15%

A89%

S11%

D0%

X0%

A84%

S13%

D3%

X0%

A80%

S13%

D7%

X0%

A85%

S15%

D0%

X0%

of 18




8.0

8.3 Improved the quality of design.

8.4 Improved the quality of construction.


Mitigation of dispute impact (cont'd).

A42%

S37%

D21%

X0%

A32%

S29%

D26%

X13%

A33%

S30%

D27%

X10%A

15%

S15%

D31%

X38%

A42%S

58%

D0%

X0%

A32%

S42%

D16%

X10%

A33%

S40%

D20%

X7%A

15%

S23%D

31%

X31%

of 18




9.0If a change to the dispute resolution process was acceptable to the parties to future contracts in Abu Dhabi, what would your opinion be to the following propositions:

9.1

9.2


Mediation / counselling by an independent 3rd party, at a low cost shared between the parties on a 50/50 basis, relying on mutual trust and cooperation, would be an effective method of dispute resolution.

Fast track Adjudication or Dispute Adjudication Boards, with industry experts giving independent and impartial contractually binding determinations, within a timescale of 1 - 3 months at reasonable cost shared 50/50 between the parties, would be an effective method of dispute resolution.

Future change.

A58%

S21%

D21%

X0%

A61%

S23%

D16%

X0%

A60%S

20%

D20%

X0%

A69%

S31%

D0%

X0%

A47%S

42%

D11%

X0%

A68%

S26%

D6%

X0%

A90%

S10%

D0%

X0%

A46%S

38%

D15%

X0%

of 18




9.0

9.3

9.4

Arbitration with its independent, impartial and finally binding nature, often using industry experts, whilst taking many months or years to reach a resolution is the most appropriate method to settle disputes, particularly as costs may be awarded in favour of the winner i.e. losing party to pay costs of arbitration.

Litigation through the courts is the best solution for settling disputes due to its final and binding nature; particularly as costs may be awarded in favour of the winner i.e. losing party to pay costs of litigation; though it may take more than one year to reach a determination, especially if appeals are permitted.

Future change (cont'd). KEY: A = Agree & Strongly Agree; S = Sometimes Agree; D = Disagree & Strongly Disagree; X = It Depends.

END OF SURVEY

A32%

S32%

D37%

X0%A

16%

S26%D

48%

X10%

A7% S

13%

D63%

X17%A

15%

S46%

D31%

X8%

A11%

S32%

D58%

X0%

A3%

S10%

D81%

X6%

A0%

S0%

D87%

X13%

A0%

S0%

D100%

X0%

of 18

dispute resolution statistics for abu dhabi's construction industry - 14th july 2012 - combined...

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