A Study on the Effectiveness of Various Alternative Dispute Resolution (ADR) Methods in Resolving Construction Disputes in Malaysian Construction Industry in Kuala Lumpur and Selangor

Law, Hei Yan (2023) A Study on the Effectiveness of Various Alternative Dispute Resolution (ADR) Methods in Resolving Construction Disputes in Malaysian Construction Industry in Kuala Lumpur and Selangor. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

The construction sector is frequently criticised for being inefficient and poor in production in this age of advanced technology. One of the reasons could be the construction disputes and unsuitable selection of alternative dispute resolution methods (ADR) that leads to ineffective dispute resolution. As consequence, the construction disputes could not be effectively resolved and causing the construction work progress to be severely dragged. Some ADR methods allow the dispute parties to be involved and negotiate during the resolution while other methods do not allow the dispute parties to involve much. Also, the skills and relevant knowledge of the ‘peacemaker’ as known as the conciliator will affect the effectiveness of ADR methods. The resolution outcome may or may not satisfied by the dispute parties. If the dispute parties are not satisfied with the outcome and refuse to comply, then the time, money and effort spent on that dispute resolving attempt is wasted and the method used is considered ineffective for resolving their dispute case. Therefore, the effectiveness of various ADR methods were studied and measured based on the satisfaction level of the dispute parties on a few criteria. Hence, the research objectives of this study are to study the types of disputes that commonly happen in the construction industry and their popularity, to identify the essential skills and knowledge for the individuals involved in construction dispute resolution and to determine the effectiveness of the various ADR methods in resolving construction disputes. The literature review was conducted to find out relevant previous studies on the three research objectives. The questionnaire was distributed to targeted respondents who are the construction experts such as the Quantity Surveyor and Project Manager who works in either consultant, contractor or developer companies and have experience in construction disputes. The data collected was analyzed by using Statistical Package for Social Science (SPSS) software. The analysis techniques used were the Cronbach’s Alpha Analysis, Descriptive Analysis and Multiple Response Analysis. Based on the analysis result, the first research objective is achieved where the types of disputes that commonly happen in the construction industry are caused by the payment issues, variations and project delay. Next, the second research objective also achieved as most of the respondents agreed that communication skills, negotiation skills, problem solving skills, construction knowledge and the construction related law knowledge are the essential skills and knowledge for a ‘peacemaker’ in resolving construction disputes. Lastly, the third research objective is achieved where the negotiation and mediation are considered as the most effective ADR methods. However, the arbitration and adjudication cannot be classified as ineffective because all of criteria are still satisfied by half of the respondents’ companies. The findings in this research will provide an overview on the common types of construction disputes that happens in Kuala Lumpur and Selangor and enables the government, related organisations and boards in reviewing the procedure, rules and regulations for potential improvement of the ADR methods