Project Management and Dispute Avoidance

Business Conflict Blog by Peter Phillips

An interesting presentation on dispute prevention was featured at the recent UIA World Mediation Forum in Prague. The presenters demonstrated that project managers, not lawyers, may be the best equipped to save time and money by avoiding disputes.

Michel Nardin of PMG in Lausanne, Switzerland, discussed various techniques such as Partnering, Claims Appeal Committees, Early Expert Evaluation and Dispute Boards to reduce the occurrence and longevity of disputes in large infrastructure projects. The challenge is how to organize the contracts governing the work in such a way as to minimize the risk of interruption by disputes. The strategy adopted to confront this challenge is to identify and deal with problems at a very early stage, and thus to make early reporting of those issues and team engagement in their solutions more likely.

Nardin spent a good deal of time on the workings of Dispute Boards, which are 1-3 person bodies who know a project intimately and resolve disputes that arise as the project proceeds. An Adjudicate Board binds parties to a resolution; a Review Board makes recommendations. He considered the ICC Dispute Board Rules a welcome addition to the literature in the practice. Nardin also pointed to two illustrations of projects in which Dispute Boards were in place: The building of a city of 20,000 residents in Qatar, and an irrigation project in Mali. He underlined the fundamental point in the latter instance: the people were not interested in whose fault a problem was; they just wanted the water to be delivered.

Christopher Miers of London gave a presentation of a product of the group Resolex (www.Resolex.com) called “X-Tracking.” This is a software bundle that gathers perceptions of key individuals on the status of various aspects of a project, rather than technical facts, and creates weekly reports on how the team views the progress of the project. Feedback in these reports is both confidential and anonymous. The team itself agrees, at the start, on which members will provide information and which aspects of the project will be reported on. Comments are inputted remotely via the internet and summarized in a chart that shows problems that are perceived as “high risk” or “low risk,” as well as whether those risks are getting better or worse since the prior week. The chart also shows trends – whether a particular problem is getting riskier or getting more benign over the past several weeks. Armed with this subjective but highly revealing information, team managers can decide where to direct resources and how to make informal corrective decisions.

The tool is intriguing in many ways, not least because it is created for managers, using managerial data and managerial evaluations to prompt managerial decisions for better project outcomes. Compared to this process, the idea of taking dispute decisions away from managers (who are professionally benefited by corrective action) and toward lawyers (who are not) seems odd.

                       

F. Peter Phillips

F. Peter Phillips is a commercial arbitrator and mediator with substantial experience providing consultation on the management of business disputes to companies around the globe. A cum laude graduate of Dartmouth College and a magna cum laude graduate of New York Law School, Mr. Phillips served for nearly ten years… MORE >