A Study of the Role of Contracting Parties in Preventing Escalation of Construction Claims Into Disputes Through the Claim Management Processes

Abstract

Poorly managed claims result in antagonism, disputes, and disruption in construction projects. This raises the need for construction parties to manage claims well and avoid disputes. This research explored how construction claims advance into disputes as a result of poor management of the claims by the parties. The following eight aspects of claim management were examined in this study: The competence of the parties’ staff in claim management; the general attitude and approach of parties during claim negotiation; the level of contractual knowledge on claims by parties’ staff; the effectiveness of the claim management system adopted by parties for managing claims; party’s desire to improve cooperation amongst themselves as an item for consideration during resolution of construction claims; the amount of evidence, quality of documentation and presentation of facts that parties present during claim management; party’s willingness to compromise during negotiation of construction claims; the level of party and party staff involvement and participation in claim management and negotiations. The study used a quantitative research approach, which involved the use of standardized questionnaires to obtain quantitative data so as to understand experiences and opinions of people in the construction industry. The research employed deductive reasoning to reach logical conclusions. A conclusion was reached that five aspects from the eight objectives were satisfactory in terms of performance. These were, construction parties’ attitude, approach, towards claim negotiations, the effectiveness of the claim management system adopted by parties for managing claims, the desire to improve cooperation amongst construction parties as an item for consideration during resolution of construction claims, the amount of evidence and quality of documentation and presentation of facts of the claim that parties give during claim negotiations , and the willingness to compromise during negotiation of claims. Three aspects from the eight objectives were however found to be unsatisfactory. These were, the competence of the parties’ staff in managing claims through the whole process of claim management, the level of contractual knowledge on claims by parties’ staff, and the level of party and party staff involvement and participation in claim management and negotiations. The study concluded that for better performance in claim management, parties should put more emphasis on the technical aspects that characterize claim management. It was recommended that parties need to relook at their level of involvement and participation in claims management by increasing their input either through outsourcing experts and self-involvement a combination of both.