Published in Rail Professional.
Entering in a dispute should always be the last resort, says John Judge
When a negative issue impacts on a project, entering into dispute can be expensive business for all parties. It is also an action that could end up costing you even more money than you’d bargained for. Therefore entering into dispute should always be the last resort.
When something doesn’t go your way on a project and it hurts, you have to be cautious of irrational behaviour and decision-making. Before deciding to begin a dispute you first need to ask yourself a series of questions. Do you want to work with this client again? How serious is your financial position? Can you afford this dispute? How will it affect your company’s credibility, and how much do you value that position? Are you seen as a soft target? Could this be the time to demonstrate some teeth and bite? Will entering into dispute put people’s careers in danger? The key is maintaining focus on the wider picture.
Early on it is necessary to establish the moral high ground. You must be able to demonstrate clearly to the other parties that you have done everything in your power to fix the problem. This is to protect yourself and put at a disadvantage any other party who has let you down in the process. So do your homework, be prepared, and arm yourself with knowledge. Going to someone and reporting a problem is good, it’s the right thing to do, but going to someone with a problem and a list of potential solutions is much better. If you have exhausted every avenue and dispute looks unavoidable, you have to be certain you will not lose.
Disputes are entirely down to people. This can be down to a lack of a proper authority in control, poor management, or poor work practice learnt on other projects and brought on to this project, the reasons really are myriad. This is why it is important to thoroughly explore certain areas of the project and to find out who amongst the team is doing a good job and who isn’t. Once a picture has been built you can take action accordingly to rectify the matter.
Sometimes though you might have to concede ‘defeat’ in order to reach a compromise and settle a dispute. In my opinion the best negotiations are the ones where all parties go away feeling like they have lost something. Those who come out best from these types of negotiations are the ones who have given the perception of losing something, victory shrouded in the illusion of defeat.
When it comes to negotiating be sure to know what you want out of the dispute. From my point of view as a commercial manager, if the project is down by £1M there is a need to recover it, so set the target high, this way it is not unheard of to come out with more than the £1M that is owed, which means you have actually succeeded in turning the project around, making it more profitable. By understanding what you want out of a dispute it enables you to define the future success of the project, which is what everyone ultimately wants.
A dispute if not resolved by the project team, senior management or in the boardroom, can escalate to mediation, adjudication, arbitration and then litigation. Mediation has its place and is the lowest risk for both parties. Adjudication, arbitration and litigation are more formal affairs, involving a court like set up, which is costly. If you are the accuser you will have to prove your case against the defence, and in either situation to avoid defeat you have to be absolute with your facts and reasoning, explaining the rationale behind your decisions and actions, both in terms of the contract and case law (if available).
In my experience the best way of winning a dispute is to avoid it altogether. This can only be done in the planning stage of a project. Successful projects are the products of good teamwork, not because of any one individual. This is why when embarking on a project it is essential to assemble the right team for the task, but you first need to understand the work required before you can put the right team in place. Thorough detailed analysis of the work required will allow you to create accurate budgeting plans, and it will also mean you have a sensible understanding of the work and can explain it clearly to potential suppliers and contractor and other parties, so misunderstandings are effectively ruled out from the start. Do not be afraid to ask suppliers and contractors questions, to make sure they are fully aware of what is expected of them.