May 30, 2014 Articles

The Standing Neutral—Low-Cost Insurance to Prevent Disputes on Construction Projects

Employing a neutral expert to act as a dispute resolver has proven successful in keeping construction projects on schedule and on budget

by Margaret "Peggy" Landry and James P. Groton

Construction is a high-risk business, often volatile, with a high potential for problems andadversarial relationships. Every project involves a multitude of participants—an owner, a design and engineering team, many members of a construction team—all with potentially conflicting interests, working on a critical path, with a shared goalto complete the project on time and under budget. Oncethe work begins, the project cannot be interrupted or delayed to any extent without serious repercussions. This is why the construction industry places a premium on resolving problems quickly.

At the beginning of a project,the participants are generally optimistic about reaching their goals and typically underestimate the potential for conflict. They often think, "What can happen?" But the reality is that all too frequentlycommunications break down, the construction plans have omissions, the weather is inclement, materials don't arrive, and subcontractors default. Each of these unplanned events, if not quickly solved or properly controlled, couldresult in a disputethat can escalate to the point where it could disrupt the project and cause the project to unravel, embroiling the parties in expensive discovery, mediation, arbitration or litigation, and ultimately lost business relationships.

Premium Content For:
  • Litigation Section
Join - Now