The effectiveness of dispute resolution techniques as used in hong kong Essay

Construction in the yesteryear

Old ages ago a building undertaking was a comparatively simple agreement. The proprietor retained an designer or applied scientist to develop the design and fix the specifications for the coveted undertaking. The proprietor and designer or applied scientist so engaged the general contractor to execute the physical building of the work go forthing the methods of public presentation to him or her. Contractors and subcontractors were comparatively consecutive frontward, simple understandings without extended exculpatory clauses. At that clip, contracts were completed with appropriate clip extensions with liquidated amendss or pay for hold are depending of who was responsible for hold. Normally the work was of first-class quality because all parties of the squad were working together. Nowadays, everything among the building industry become complex and likewise resulted in a complex difference declaration whether for a colony of minor issue.

Construction Claims

In many building undertakings, the statement ever arisen among the parties, i.e. , in between the contractor, adviser, stuff provider and employer and in relation to the conditions of contracts, building design, buildability, building methodological analysis and building criterion and etc. Likewise the statement will bit by bit step into a claim as the parties are purposes to continue their rights, involvement and duties as the statement of the plants will ever ensue hold and break to the building advancement and accordingly incurred in an extra clip and cost to the undertaking under several peculiar fortunes.

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Presents, the building undertakings are going more and more complex due to the invention, development and engineering development in the industry, the apprehension and reading of the undertaking demand may differs among the parties ( Malak and Saadi and Zeid 2002 ) . In the interim, the increased complexness of building undertaking, the building processes, specification, paperss and conditions of contracts has been part to higher possibilities of struggle that consequences a higher frequence of claims issue.

There are many different types of building claims are into classs relative to footings and by and large defined in a contract. The parties are required to treat the claim in conformity with the demand specified in the chief contract. Normally the claims are raised by the contractor as they were the first party acknowledge the building advancement is hold or disrupted by some sorts of event and responsible to place the fortunes for describing to the employer. The employer will so necessitate measuring the claim issue. However, the footing of the designation of claims issue is frequently non exhaust plenty by the contractor and hence the employer will hold a trouble during the assessment procedure that consequences an inauspicious desire to the claimant, which is the contractor. Consequently, the claims can non fulfill the claimant by extension of clip or extra money during the building period and go a higher grade of difference that is requires farther difference declaration.

All claims have the possible to be clip devouring and expensive one time the claims has different apprehension among the employer and contractor ( Barnard 2005 ) . To cut down the possible clip cost and expensive, normally the associated parties in the claims will proposed to a difference declaration, i.e. , Litigation, Mediation, Conciliation, Adjudication, Arbitration and etc. for minimise the unneeded cost. Though these difference declarations are really common, the effectivity is questioned by the industry due to the higher cost and clip are still required for treating these declarations.

Research Aim, Objective ( s ) , Hypotheses


The purpose of this research paper is to look into the effectivity of difference declaration techniques as used in Hong Kong. And, the probe is concentrate on the reappraisal and quantifying the procedure and result effectivity of one of the common usage difference declaration – Mediation.


* To carry on a critical reappraisal of literature associating to the definition and procedure of Mediation.

* To carry on a critical reappraisal of literature associating to the history of difference declaration of Mediation in Hong Kong. To reexamine and look into bing common usage of difference declarations in Hong Kong.

* To research and detail the existent procedures, the difference in between these difference declarations, analyse the advantage and disadvantage of these difference declarations and summerize the general decision of these declarations.

* To roll up informations by face to face interview through the professional organic structure that has experience involves in building claims and mediation procedure.

* To summerize and analyze the effectivity of mediation which in the footing of clip cost and contemplation by the controversialists.

* To pull decision on the quantified effectivity of mediation to attest the acknowledgment by the building industry and measure the hereafter development of the applicable of mediation.

Literature Review

How claims propagate to a difference

“ A claim may be defines as “ a petition, demand, application for payment of presentment of presumed entitlement to which the ( claimant ) , justly or wrongly at this phase, considers himself entitled and in regard of which an understanding has non yet been reached ” ( Barber and Hughes, 1992 ) .

For protect their ain involvement, the claimant will quickly militias his rights to claim and presents a elaborate history of the claims merely a the demand of the undertaking where they can take advantage of any losingss and holds and integrate them into a claims. Therefore, the prevalence of the reserve of rights approach a building claims. Normally, the contractor is the ‘host ‘ and ‘navigate ‘ the claims as the ‘change ‘ to the undertaking is ever request by their employer, proprietor, adviser, employer or employer ‘s representative and the cogent evidence of contractor is breach the contract by the employer is frequently a hard undertaking ( Hassanein and Nemr 2007 ) .

The alteration orders were the most prevailing causes of claims. The frequent visual aspect of a alteration order on a undertaking is due to the applied scientist do a less thorough occupation in the design and planning phase and thenceforth, the employer attempt to minimum the costs by non be aftering the undertaking as real-time since initial planning. As a consequence the employer is put in a place where they are less likely to expect inauspicious conditions before they arise and are less capable of covering with the variable.

Consequently, legion instances had been reported about the contractor was received direct initiations from the employer ‘s representative or advisers due to their hapless direction in the pre-contract stage and outdate realisation of the undertaking. The effect was extra incurred disbursals. The increasing range of work and ill coordinated designs result alteration order and easier to propagate a building claims. In add-on, the differing site conditions, faulty building paperss, suspensions of the work at the way of the employer or adviser, unlawful holds in managing store drawings, late bringings of owner-furnished equipment and stuffs, intervention by other premier contractors, deficiency of site entree and etc. are easier to represent a contractor claims one time the hapless direction pattern occurs in the employer ‘s squad.

The building undertaking is frequently delayed by the alteration and a claim may originate on history of a hold break. The nature of the building claims leads to adversarial relationships sing impacts and alterations and frequently consequences in differences.

Background of Mediation

The colony of differences originating from building industry by methods other than judicial proceeding is common pattern. The chief ground for this is, where the significant inquiries of the difference are affairs of fact instead than of jurisprudence, a concluding and conclusive determination can be obtained in a mode which is quicker and cheaper than the formal legal.

Construction differences have used mediation since 1985 ( Phillips, 1997 ) . Compared to judicial proceeding, mediation has proved to be a faster, less expensive, more confidential, and more satisfactory manner to decide differences.

There is a national tendency in favour of alternate methods of difference declaration and off from the “ trench warfare ” manner of judicial proceeding which has become so dearly-won in recent decennaries. Mediation reflects a displacement in the balance of power between employers and their attorneies. In “ adust Earth ” judicial proceeding the difference is in the custodies of litigants whose strength lies in gesture pattern and mammoth discover regimens. Mediation cuts through the posturing and tactics of judicial proceeding to acquire the virtues of the difference, where the employer is more of an authorization, and to acquire to colony dialogues, where the employer controls determination devising ( Fisher 1994 ) .

In fact, Mediation is a popular manner of difference declaration in the United States ( Bush and Folger 1994 ) . As it is a non binding, consensual procedure of deciding struggles through colony conferences expedited by an impartial 3rd party who facilitates dialogues ( narratives and their reading ) between the controversialists ( Gillie et al. 1991 ; Rondeno and Rumbaugh 1999 ) . Mediation may be considered a signifier of distributive justness, even though the postulating parties control the treatment of the struggle and is ultimate declaration. It can be entered into voluntarily or as a consequence of a tribunal order, and it does non adhere the parties in any manner other than by common understanding.

Obviously, the mediation has been introduced and widely applied as a colony method of difference to building industry for more than twenty old ages. As mediation describes a voluntary procedure which either side may abandon at any clip ‘without bias ‘ , whereby each side to a difference is brought together before a impersonal go-between, whose map is to help the parties to get at common place by joint unfastened session and private caucus ( Hills 1995 ) . During this procedure the go-between acts merely as accelerator, non showing his or her ain sentiment and non unwraping confidential information imparted by one of the parties, to the other. Through this procedure the parties move nearer together until they reach a common place when colony is reached. Because the mediation procedure itself is non binding and wholly without bias, it is necessary to enter the understanding, in contract signifier, if it is to hold legal consequence.

Although mediation is non regulated procedure, some regulations do be and are published by a few organisations that is applicable to Hong Kong building industry. For illustration, the Construction Industry Mediation Rules published by the National Arbitration Committee in the United States, and the Hong Kong Government Mediation Rules published by the Government of Hong Kong.

Mediation Procedure

The Mediation is begins with the understanding of controversialists that purposes to settle certain sum of money and use a reciprocally agreed go-between to get down mediated meeting to specify issues and corroborate each side ‘s committedness. Agreement to intercede in the event of a difference is either through footings of the contract ( such as a mediation clause ) , or by common consent when the difference arises. More normally, one party approaches the mediation company to get down mediation proceeding. A representative so contracts the other side ask foring them to collaborate in a mediation and effect assists the controversialists in negociating a colony. This is a signifier of corporate determination devising in which the go-between facilitates voluntary understandings between the parties in difference. During this determination doing procedure, the go-between compiles information, evaluates options, and makes suggestions to the controversialists taking for a consensual understanding. The go-between will run into each party in bend to help them to analyze and foreground the several strengths, and failings of their instance and, if he is so authorised, carry offers from one side to the other until the parties reach a common place, as a consequence, the go-between helps in interrupting barriers and drawing communalities. In these contexts, mediation is regarded as nonthreatening, and effectual in stamp downing or even settling building difference. Therefore, mediation is used because of the chance of accomplishing colonies that are reciprocally hearty, win-win state of affairs, cost effectual, flexible, speedy, confidential, and voluntary. At this point a colony is normally agreed and, if the parties so wish, a contract will be drawn up to do the footings of the colony lawfully adhering ( Hills 1995 ) .

Why Mediation

This method is aimed to use an independent 3rd party for aid to hold certain specified desires from the controversialists in a short clip and most likely they will fulfill the mediation consequence as the lightly judicial proceeding is applied and cost economy in comparing with other difference declarations. And, mediation can “ re-start ” the usual class of building claim declaration by carving out one or more of the simpler claims for early understanding. Even if the parties can non hold that those via medias will be paid right off, at least they can qualify that they will be paid as portion of any arbitration award or tribunal judgement. The existent value of such partial colonies is that they improve the ambiance. They demonstrate to each side that the other is moving on good religion and deserves some credibleness. A good mediation advocator helps place the client ‘s existent involvements and demands, so that it is possible for the parties to make a deal. For illustration, a contractor may be less interested in money than in holding extra clip to finish the occupation, or in obtaining future work, while the proprietor wants the undertaking completed as rapidly and every bit economically as possible. Because the parties craft their ain colony, they are more likely to honour their understanding voluntarily. Mediation besides provides a forum wherein the aggrieved party can show its place or defence straight to the opposing party instead than through an lawyer ( Trantina 2001 ) , thereby giving the aggrieved party “ voice or acknowledgment of being heard. Besides, mediation can continue the party ‘s relationship ( Lederman 1997 ) . Mediation show of commercial acumen and far from being soft, it is a uninterrupted procedure of structured, condensed, guided and intense dialogue necessitating adeptness of head, flexibleness and inventive thought. And mediation can be used at the same clip as judicial proceeding or arbitration processs or can replace judicial proceeding. So it is possible to litigate or intercede to demo serious purposes but to negociate with mediation to acquire a better consequence.

Even the mediation fails, it has more benefits than hazards. Mediation can be tried fast and at small excess cost. Parties are free to go forth the procedure if it is unproductive ( Harmon 2003 ) . At the same clip, utilizing mediation helps clear up the issues, helps with readying for test or farther dialogues and encourages a realistic appraisal of the instance more quickly than the adversarial procedure.


The rule determination of this paper is aimed to hold a brief reappraisal of an apprehension of mediation in building industry. An probe is besides held for realised the eventful consequence is resulted by building claims to the industry.

However, the result of initial happening on the literature reappraisal is non ideal as original idea. The building claims detailed in many literature documents are chiefly concentrating on the claims consequence how hold and interrupt the undertaking that really limited studies are specified, i.e. , the result consequence of mediation, the debatable occurs during the mediation.

For the research purpose sing dispute declaration in this study is assess the effectivity of the mediation. As this study is merely concentrating the difference declaration on Mediation, rather a batch of literature studies really already hold concluded the effectivity of this declaration methods. Unfortunately the complete consequence is limited to name out the advantage and disadvantage of this declaration and leads to hold a personal ( writer ) prejudice which seems non neutrally plenty ( Yiu & A ; Cheung & A ; Mok 2006 ) . Furthermore, it is non hard to hold the cognition of the procedure of difference declaration but the cardinal information or existent mediated instance is difficult to obtain. Most likely the ground is mediation is non unfastened to public. As a consequence, the critical information of existent instance for consolidates confirmation to this study is comparatively really limited.

In drumhead, the subject really has a greatly development infinite as the ‘gap ‘ of the above said research aim do be in the industry. The general description on the result consequence of mediation by limited mention to existent difference instance is the cardinal determination during this probe of literature reappraisal. And as supra mentioned the documents are merely listed out the specifics of the mediation without any amalgamate informations, i.e. , sum to settle, clip consumed and cost of mediation. Consequently, the mediation application has non been clear identified for which graduated table or what sort of differences. The trouble of informations aggregation is recognised and foreseeable. Therefore, the farther development of the concluding study will be ab initio concentrating on the existent instance informations aggregation and the development of quantify effectivity of mediation.


Based on the concerning to the aims of this research paper, the research methodological analysis is considerate to take uniting a instance survey and face to confront interview with associated professional organic structure in the building industry who has similar experience that involves in the building claims and mediation procedure.

The presentation of a instance survey can reflected the cause and effect of a claims event as a full narrative wide and consequently bespeak how the claims falls into a difference. From the reappraisal of the claims procedure by a instance survey method, we can easier to understand the cardinal ground why the claims event is arisen and specifying the claims type or finding the cogency of claims by the point of position as an external 3rd party. Thereafter, based on the stances of the relevant parties on the claims can measure the necessarily of the difference as the claims somehow is without any contractual land backup but become as a difference shortly.

For the method of face to confront interview that is an effectivity and consecutive frontward way to obtain the consequence. The professional organic structures who has experience on a claims and mediation procedure are able to state what the effect and sequel of a building claims and how the difference declaration procedure. Furthermore, the method for buttocks the effectivity of the difference declaration is by quantified the clip cost by these peoples contributed on each instance.

The instance survey will choose the building undertaking that has a difference for item analysis and exemplify the differences among the building industry in Hong Kong.

The instance survey will be considered a recent completed span undertaking in Hong Kong. This undertaking is one of the longest overseas telegram stayed Bridgess in the universe. The span was merely completed late and has 2 old ages delay from the originally planning. Mediation has had been carried out for settle the claims difference in early building phase.

For the face to confront interviewer choice, it is really depend on the handiness of those forces. However, the mark interviewer is decide to run into minimal 4 professional organic structure involved in this undertaking, presuming the cardinal informations can be obtained among these professional organic structure.


In this research paper, it can be foreseeable the trouble to systematize and place the difference nature among the building industry. Initially, to roll up the claims issue event from the as-built existent building undertaking is clip devouring and require tonss of contacts to run into this aim but the result may non be satisfied to accomplish the original thought as the industry ever maintain the claims as a confidential issue and non open to irrelative parties. Eventhough the claims was settled wholly and non necessary proceed to sorts of judicial proceeding or arbitration, the information sing the colony decidedly involves a amount of monies that the industry still inclined non to let go of the inside informations as a mention for any farther similar claims.

Whilst the peoples who involves in the claims procedure of a building undertaking are really limited to Claims consultancy, Q.S. or senior director. These peoples are ever hard to make and as the industry ‘norms ‘ , the fact of the claims event may non show thorough. It means the realistic of claims event may be questionable due to the restriction of the beginnings.

However, for simplify the rating of the effectivity of the difference declarations is quantifying the clip cost and feedback from the controversialists, farther step the applicable frequence of this declaration.

Research Programme

Please refer to Appendix A

Ethical motives and Safety Approval

Please refer to Appendix B


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