Theoretical Framework to Enhance the Level of Achieving Desired Outcomes of Alternative Dispute Resolution in the Construction Industry

The success or failure of dispute resolution depends largely on implementing a proper mechanism to resolve the particular dispute while having a sound understanding of the ideologies and features of each dispute resolution method. Even though the issues of alternative dispute resolution (ADR) in the construction industry have been addressed adequately in length, the actual scenario of ADR’s success with respect to achieving its desired outcomes is less researched. This research aimed to fill this knowledge gap by enhancing the success level of using ADR in building projects in Sri Lanka with respect to the level of achieving the desired outcomes of using ADR. The research employed predominantly a qualitative research design, entailing both survey and case study strategies followed by semi-structured interviews and document reviews as the main data collection techniques. Manual content analysis and cognitive mapping were used to capture primary data findings. Parties’ ability to control over proceeding is identified as the most successfully achieved desired outcome. Faster resolution, least transaction cost, preservation of relationship between the parties and the inability to ignore the decision after a time bar, are found to be the next in order. However, it was elicited that the parties rarely achieve the desired outcomes as expected, on five key reasons, namely being restricted to following the standard bidding documents, unawareness of the initial stages of ADR practices, attitudes of the parties, malpractices in the industry, and incapacity and inadequacy of professionals. Recommendations were made to enhance the level of achieving desired outcomes of using ADR while minimizing the loopholes identified in the case study findings.

The framework developed in the current study outlines the reasons for the low level of achievement of desired outcomes when using ADR and provides recommendations to improve the level of achievement of desired outcomes and thereby make the ADR process successful. This framework will assist construction industry stakeholders to utilize ADR for a particular dispute effectively and achieve the desired outcomes of using ADR rather than making it more complex like in litigation. The framework specifically outlines the causes of the low achievement of each desired outcome of ADR. For instance, during an ongoing dispute, if the parties to the dispute want a faster resolution, they can get to know the possible causes that slow down the process and engage with recommendations given in the framework to achieve their desires. Moreover, the practitioners who are involved in resolving disputes (mediators, adjudicators, arbitrators) can use this framework to deliver the best outcomes to their clients. In addition, governments and respective organizations can refer to this framework to introduce necessary changes to the conditions of contracts and relevant legislation to scrutinize the construction dispute resolution procedures. Ultimately, the findings of this study will indirectly aid in enhancing the overall impact that the construction industry would make on the economy since unsuccessful ADR processes have hindered the success of many construction projects and ended up with massive losses.