Learning from the Past: Analysis of Factors Contributing to Construction Project Disputes in Australia

It is commonly acknowledged that the nature of construction projects is largely fragmented as it is invariably carried out by diverse parties having different aims and objectives. Such a lack of integration typifies the nature of construction industry and arguably makes it prone to project disputes. This paper presents a research study that investigated the key factors that contributed to actual disputes occurred in past construct projects in Australia. The research provides a review of underpinning background knowledge on construction project disputes, as well as their origins. In particular, the research focuses on five main types of disputes: breach, failure to settle and appeal, interpretation, insurance and indemnity and security of payments. Based on this theoretical framework, a qualitative analysis was conducted on 78 court cases data obtained from the LexisNexis database to determine key factors contributing to construction project disputes. The results of this investigation determined that the main factors contributing to disputes were damages, negligence, timing, payments and variations. The 'payments' factor was the highest contribution factor (more than 50%) across all the analysed dispute types. This suggested that most of the disputes originated from a payment disagreement. Additionally, breach was found to be the most frequent type of dispute occurred, with 'damages' as the main contributing factor within this type of dispute. The main implication derived from the research findings is that the identified factors contributing to disputes have some element to them that can be specified in the contract and potentially help prevent a dispute, for instance: the amount of general damages that an alleged party can claim; the specification of materials to avoid defective work and thus negligence; the procedure to follow when an extension of time is required; a description of progress and payment claims following its respective legislation; and an appropriate agreement when a contract variation is needed. If these issues are carefully described and understood in the contract, potential disputes can be avoided.