Academic literature on the topic 'Security of payment; dispute resolution; building and construction industry'

Payment delays are endemic in construction projects across the world. Research has shown that payment delays are leading causes of time and cost overruns, disputes, and bankruptcy. Payment delays also have significant economic consequences for companies, jobs, and growth. While adequate research has been conducted in India on causes of delays in construction projects, there has been almost nil research on why payments delays occur and what are the most feasible solutions for reducing payment delays. This research analyses responses of comprehensive questionnaire survey based on literature review and in consultation with industry experts and academia in India and abroad. The survey was administered to select group of approximately equal numbers of major categories of stakeholders directly involved in construction projects. Statistical analysis of the results eventually reflected major implementable points in terms of capacity building, dispute resolution mechanisms, and contract formulation for achieving major impacts in reducing payment delays.

Dispute is recognized as critical cause of deficiency and low performance in construction projects. Plenty of studies have been done in construction dispute management recently; however, there are no studies on construction dispute elimination. This study aims to propose a building information modeling (BIM) approach to control conflict causes before the occurrence of dispute. BIM is one of the latest platforms that promote a high level of collaboration, information sharing, and coordination where its implementation ranges from project initialization to completion stage. The circumstances associating with BIM technology can be utilized to explore the possibilities in conflict and dispute resolution system. Questionnaire surveys are used to collect the primary data. Analytical hierarchy process (AHP) and multi attribute utility technique (MAUT) are adopted to develop an algorithm and a decision-making framework to manage and resolve the potential conflict causes, particularly for the Malaysian construction industry. Data analysis emerged that five critical conflict factors in Malaysian construction industry are insufficient monitoring of CPM scheduling and updates requirements; failures to understand and correctly bid or price the works; delay in running bill payment; inadequate contractors’ management, supervision, and coordination; and error and omission in design that are originated from time, cost, quality, and documentation. Further analysis to prioritize BIM functions in construction conflict management has been done by the combination of AHP and MAUT results. Consequently, it is affirmed that clash detection and cost estimating, 4D scheduling, 3D visualization and structure analysis as BIM functions obtained the highest score to control conflicting factors.

Abstract In the face of several uncertainties in the construction industry, conflicts and disputes seem inevitable. The aim of this systematic literature review of methodologies for prevention and resolution of conflicts was to develop an updated guidance for conflict management in the construction industry. To achieve this, we developed a novel tool termed Modified Reporting Items for Structured Reviews in Engineering and Technology (MORISE) that considered a modified tool from the original literature review method Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA). Three databases, ScienceDirect, Scopus, and American Society for Civil Engineers (ASCE), were searched and 61 articles were shortlisted. In terms of frequency of reasons cited as causes for disputes, payment regimes and delays rank first, followed by written agreement interpretation and changes in projects. Acceptable approaches to resolution of disputes include negotiation, arbitration, facilitation, and dispute resolution boards. This study were able to make a clear distinction between methodologies adopted by various researchers for the prevention and resolution of conflicts and show that in addition to prevention of conflicts, there are comprehensive and suitable techniques to resolve conflicts, which can be adopted in practice.

Purpose Statutory adjudication was introduced into the security of payment (SOP) legislation as a fast-track payment dispute resolution process with an express object to facilitate cash flow within the construction contractual chain. After more than a decade of the operation of the regime in Australia and Singapore, it becomes apparent that there are many operational problems that jeopardise the intended object of the legislation, particularly in adjudicating complex payment disputes. The aim of this paper is to explore views of the industry stakeholders regarding some operational problems of statutory adjudication of as well as possible solutions. Design/methodology/approach “Expert interviews” method is adopted to collect the empirical data, involving interviews with 23 practitioners from Australia and Singapore. Findings The study identified many operational problems jeopardising the attainment of the object of the SOP legislation such as bias of authorised nominating authorities, short adjudication timeframes, inadequate regulations of adjudicators, jurisdictional challenges, involvement of courts and lawyers and complex drafting of the legislation. The study also analysed the views of industry experts with regard to the opportunities for improvement in the operation of the SOP legislation such as following the Queensland model as amended, and introducing a legislative review mechanism and establishing a peer review process. It also suggested specific amendments to make the legislation a more user-friendly. Practical implications The implication of this study is a better understanding of the most critical problems inherent in statutory adjudication that need serious consideration by the legislatures and policymakers. In addition, the study also provides some practical measures as suggested by the industry practitioners for each identified problem which may stand as a reliable reference for potential reform in the SOP laws. Originality/value There is inadequate empirical research conducted to investigate problems in the operation of statutory adjudication. The study provides original empirical findings which become much necessary nowadays in light of the dynamic moves towards law reform in SOP laws, particularly in Australia. The study provides some practical measures as suggested by the industry practitioners for each identified problem which may stand as a reliable reference for potential reform in the SOP laws.

Over the past twelve years, building and construction industry security of payment legislation has progressively come into force in all the Australian States and Territories. A primary objective of the legislation is to ensure that parties in the industry receive timely and fair payment for construction work carried out and/or related goods and services supplied. In order to achieve this objective, the legislation has focused on removing unfair contractual payment provisions, establishing a default right to progress payments in the absence of such contractual provision, and providing a swift, interim method of dispute resolution for payment claims in the form of an adjudication scheme. As such, a party who claims it is owed money under a construction contract can refer its payment claim to an independent adjudicator for a rapid determination of the amount (if any) due. Such a determination has binding effect, pending any eventual outcome from a more formal dispute resolution process such as litigation or arbitration. There is a lack of uniformity between the various Australian Acts. Many commentators distinguish two broad Australian legislative models, with key differences as to the scope of disputes covered, and the payment provisions and adjudication schemes prescribed. These inconsistencies have resulted in extra costs to the construction industry due to the unfamiliarity, uncertainty and confusion with security of payment laws and procedures in the various jurisdictions. Furthermore, the cost to the public purse of administering the legislation is exacerbated by the need to educate stakeholders about eight different regimes. The time is ripe for action to be taken to harmonise the legislation. Accordingly, this thesis proposes a legislative approach which is appropriate for adoption on a nationally uniform basis. The proposed approach is informed by a review, on the available evidence, of the performance of the Australian schemes, and an evaluation of the schemes by reference to a set of criteria drawn from the dispute resolution literature.
Thesis (Ph.D.) -- University of Adelaide, Law School, 2012