The first thing that first aiders are taught is the “Three P’s of First Aid” which are “preserve life”, “prevent further harm” and “promote healing”. Similar thinking can be applied to an incomplete construction project which is in dispute or heading towards a formal dispute process. Project managers and contract administrators involved in disputed projects are something like a paramedic to the lawyer’s doctor1.
In the construction context the “Three P’s” translate to three instructions:
- Do not make it worse.
- Do not compromise your position.
- Do try to make it better.
By adhering to these simple guidelines even the most challenged project can make it to completion.
Do not make it worse
It is a truism that people build projects. It is critical not to lose sight of this when a dispute is underway.
Regardless of the status of the dispute, while there are works to be completed, representatives of the contractor and employer have to interact, both in person and via correspondence. This can present a challenge where the parties are engaged in a dispute in another forum.
One way to take pressure out of the relationship is to move management of the dispute to an entirely separate team and let the project staff focus on the day-to-day tasks associated with completing the job. There are collateral benefits to this approach in terms of maintenance of privilege and, importantly, in getting the separate claims team to provide an impartial view of the merits of the dispute.
In such a situation the claims team should adhere to a communications protocol. Such a protocol would limit the number of people who communicate directly with the project team, the other side and any lawyers. Adherence to the protocol means that communications about the dispute can be easily corralled and managed so as not to lose legal privilege.
Of course, the project teams will still need to talk to each other. In such situations there usually are handover inspections, punchlist works to be completed and as-built documentation to be exchanged. Without communication, the job would never get finished. But, when corresponding across the contractual divide, it is important not to add fuel to the fire. So, prepare your correspondence carefully and treat meetings with caution but, most of all, be polite. It sounds simple, but being polite in all of your dealings with the other party can go a long way to taking the heat out of the relationship. It can help parties focus on getting on with the job rather than putting energy into making or defending personal attacks.
Do not compromise your position
Of course, being polite doesn’t mean giving up your position. It is perfectly fine to say “I disagree” and move on. However, contractors should be mindful that there is usually a clause in the contract which mandates performance even in the face of a dispute. Failing to perform in those circumstances might amount to a repudiation which, in turn, might expose the contractor to a damages claim.
Of course, there might be a power, whether in the contract or in statute, for a contractor to suspend work in some circumstances. If this power is engaged correctly it can create leverage in negotiations which might be useful in bringing the dispute to a mutually beneficial conclusion.
Do try and make it better
Similarly, the project team can’t just adopt the “ostrich approach” and ignore the existence of the dispute. They should work to help the personnel involved in managing the dispute.
At the individual level this might include: responding promptly to requests for information; drafting a preliminary witness statement; not talking to other project team members about evidence; or filing correspondence in a way that will make it easy for the disputes team to find important information – for example, if a particular variation is in dispute then make sure all of your emails and diary notes related to that variation are in one spot.
At the project level “trying to make it better” means adhering to the dispute resolution procedure set out in the contract2. However, never lose sight of the fact that there is nothing immutable about the dispute resolution process. If it doesn’t suit the particular dispute there is nothing to stop the parties from agreeing to adopt a different, customised, procedure.