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13 June 2019
Construction disputes by their very nature lend themselves to arbitration as opposed to other means of dispute resolution. This is because they often involve international contracting parties and complex disputes over factual issues which require expert consideration (which parties often wish to keep confidential). They also invariably involve large volumes of material and evidence (factual and expert) to make sense of what actually happened on site.
While no project party wants to end up in arbitration, failure to implement systems and processes to effectively capture and store project documentation at the outset can lead to unnecessary delays in the event that proceedings do become necessary.
In construction disputes, a significant amount of legal time (and therefore expense) is often spent simply locating and trying to understand the relevance of key documents due to poor document management practices throughout the project lifecycle. In general, this is compounded by the fact that unresolved disputes are typically referred to arbitration at the end of a project when key project personnel – who often have the best understanding of what happened on site – have moved on to other roles.
Effective document management during project delivery can avoid this issue, as well as:
This article provides some practical tips for contractors and suppliers on how information can be stored and managed throughout the project delivery phase in order to ensure that a project, and any dispute resolution, can be completed smoothly.
Construction projects, particularly in the energy and infrastructure space, can involve remote and extensive sites. Site teams that are performing the work – and are therefore aware of what is going on in a day-to-day sense – are often physically separated from the personnel administering the contract.
This is often the case for many energy and infrastructure projects – for example, in Southeast Asia, where a contractor may have its contract administration team in its head office in Singapore or Bangkok managing its projects throughout the region. Even on more traditional building projects, such as apartment tower complexes, the team administering the contract may be based in – and rarely leave – the site office.
The result of this physical separation is an information disconnect between those who know what the issues on site are and those who have the capacity to progress any claims relating to those issues through contractual dispute resolution mechanisms. Where applicable, this can result in claims becoming time barred and a loss of entitlement to make a claim at a later date.
It can also mean that the information relevant to that potential claim is simply never captured – for example, a photograph is never taken evidencing the issue as it existed at that point in time, and once it is discovered that a claim could be made, that opportunity is lost because work has further progressed.
The key then is to make the transmittal of information from site to those people progressing claims as quick and efficient as possible. This can be done by physically locating the teams together or, where this is impossible, by holding regular meetings or catch-ups to discuss the progress of work and ensure that the project is being delivered in an agile fashion.
Contractors and suppliers may also wish to consider using technology to facilitate this information flow – for example, apps which quickly communicate information or tablet devices which the site team can use to take photos that are automatically geolocated and can be centrally stored for use by the administration team.
It is critical to store information centrally and logically. Without a document storage protocol, those on site will store information haphazardly on personal computer drives, in hard copy notebooks, in the same way in which they stored information on other projects (which may not be the same as others) or not at all.
Folders should be set up on a shared or project-specific drive which separate:
It may seem counterintuitive, but involving a legal team to help manage the transition of information prior to the end of the project delivery phase can save time and costs in the long run. This is because the legal team can assist in identifying:
When it comes to construction arbitration, hoping for the best but planning for the worst at the outset of a project will save participants significant time and money when it comes time to participate in the arbitral process. Establishing clear guidelines for document management and information collection is critical to this process and will assist contractors and suppliers in making and evidencing claims in arbitration.
For further information on this topic please contact James Morgan-Payler or Danielle Strain at Norton Rose Fulbright LLP by telephone (+61 3 8686 6000) or email (email@example.com or firstname.lastname@example.org). The Norton Rose Fulbright LLP website can be accessed at www.nortonrosefulbright.com.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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