Construction in New Zealand appears to be at an all-time high. This will no doubt have welcome consequences for increased infrastructure, but it can also mean increased construction disputes with little time to resolve them given project management timelines.
Although CODR provides avenues for resolution if matters do come to a head, preventative measures are almost always a better approach. Here are some tips to prevent getting yourself involved in a construction-related dispute:
1. Put all discussions into writing
It’s very easy for things to go awry when there is nothing documenting the agreement between the parties or variations to that agreement. Things to look out for are usually small variations from discussions or oral communications which aren’t documented in the original contract. That’s why it’s important to capture everything in writing and any variations to the original agreement should also be documented, approved and signed off.
Having an agreement which clearly sets out what happens when a partnership or business relationship breaks down can minimise the cost of resolving a dispute. For example, you may choose to include provisions in your construction agreement that makes mediation mandatory if there is a dispute during your build.
2. Keep everyone in the loop
One of the best ways to avoid conflict and misunderstanding is to ensure clients, contractors and other related parties know are fully informed at all times. This may include informing them regularly about any changes in costs, budgets and/or scheduling. This helps to establish a good working relationship with open lines of communication that can prevent litigation.
3. Act before it escalates
If you take steps to deal with a smaller issue when it arises, you can often prevent it developing into a major problem.
4. Think about who you want to do business with
Before you start a construction project, do your due diligence on your potential counterparty. Consider, in depth, whether they are the type of people you would want to work with before signing up to anything.
Disputes are a negative distraction that drain human resources and have a negative impact on profit margins. Accordingly, it makes sense to employ an approach that minimises the chance of them arising.